ZION
Zions Bancorporation NA
Price:  
55.5 
USD
Volume:  
1,082,797
United States | Banks

ZION WACC - Weighted Average Cost of Capital

The WACC of Zions Bancorporation NA (ZION) is 8.2%.

The Cost of Equity of Zions Bancorporation NA (ZION) is 10.9%.
The Cost of Debt of Zions Bancorporation NA (ZION) is 5%.

RangeSelected
Cost of equity9.6% - 12.2%10.9%
Tax rate21.7% - 22.2%21.95%
Cost of debt5.0% - 5.0%5%
WACC7.4% - 9.0%8.2%
WACC

ZION WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta1.251.32
Additional risk adjustments0.0%0.5%
Cost of equity9.6%12.2%
Tax rate21.7%22.2%
Debt/Equity ratio
0.630.63
Cost of debt5.0%5.0%
After-tax WACC7.4%9.0%
Selected WACC8.2%

ZION'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 ZION:

cost_of_equity (10.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.25) + 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.