GS
Goldman Sachs Group Inc
Price:  
598.54 
USD
Volume:  
1,530,825.00
United States | Capital Markets
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GS WACC - Weighted Average Cost of Capital

The WACC of Goldman Sachs Group Inc (GS) is 11.2%.

The Cost of Equity of Goldman Sachs Group Inc (GS) is 11.80%.
The Cost of Debt of Goldman Sachs Group Inc (GS) is 14.05%.

Range Selected
Cost of equity 9.30% - 14.30% 11.80%
Tax rate 20.40% - 21.40% 20.90%
Cost of debt 4.20% - 23.90% 14.05%
WACC 4.2% - 18.1% 11.2%
WACC

GS WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.18 1.68
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.30% 14.30%
Tax rate 20.40% 21.40%
Debt/Equity ratio 5.93 5.93
Cost of debt 4.20% 23.90%
After-tax WACC 4.2% 18.1%
Selected WACC 11.2%

GS's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for GS:

cost_of_equity (11.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.18) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.