Looking for a realistic WACC by industry to use as a starting point? This table provides industry-average WACC (cost of capital) benchmarks you can use to sanity-check your assumptions before running a company-specific calculation.
WACC (Weighted Average Cost of Capital) is the blended required return demanded by a company’s capital providers (equity and debt). In practice, it’s commonly used as a discount rate for DCF/NPV analysis and as a hurdle rate for investment decisions—if a project can’t beat WACC, it’s usually destroying value.
These benchmarks are built from U.S. public-company industry data (latest full refresh: January 2026). Use them as a baseline, not a final answer—your true WACC will move with interest rates, leverage, business risk, and geography.
Industry WACC (2025) WACC (2026) Notes Advertising 9.22% TBD Good baseline for agencies/marketing services Aerospace/Defense 7.68% TBD Often steadier cash flows; adjust for contract concentration Air Transport 7.29% TBD Cyclical + leverage sensitive; treat as a range Apparel 7.44% TBD Brand strength can materially shift WACC up/down Auto & Truck 10.34% TBD High operating leverage; validate beta assumptions Auto Parts 8.09% TBD Supplier dependency matters a lot Bank (Money Center) 5.64% TBD Banks are special cases—don’t force a standard WACC if valuing equity Banks (Regional) 5.69% TBD Same caveat as above Beverage (Alcoholic) 6.55% TBD Often resilient demand; confirm leverage Beverage (Soft) 6.59% TBD Defensive profile; adjust for geography Broadcasting 6.03% TBD Ad cycle exposure Brokerage & Investment Banking 5.74% TBD Financials caveat applies Building Materials 9.46% TBD Cyclical; stress-test with higher WACC Business & Consumer Services 8.27% TBD Broad bucket—match comps where possible Cable TV 6.28% TBD Legacy cash flows vs churn risk Chemical (Basic) 7.63% TBD Commodity exposure Chemical (Specialty) 7.67% TBD Moats can lower WACC vs basic chemicals Coal & Related Energy 9.23% TBD Regulatory + transition risk Computer Services 8.72% TBD Services often lower than pure product risk Computers/Peripherals 9.29% TBD Hardware cyclicality Drugs (Biotechnology) 9.37% TBD Stage of pipeline matters more than “industry” Drugs (Pharmaceutical) 8.72% TBD Patent cliffs + pricing risk Education 8.10% TBD Business model sensitivity (B2C vs B2B vs regulated) Electrical Equipment 9.40% TBD Industrial cycle exposure Electronics (General) 8.55% TBD Supply chain + pricing power are key drivers Engineering/Construction 8.17% TBD Project risk → consider project-specific adjustments Entertainment 8.28% TBD Hit-driven revenue volatility Environmental & Waste Services 7.88% TBD Often stable with long contracts Green & Renewable Energy 6.50% TBD Project finance + subsidy/regulatory sensitivity Healthcare Products 8.50% TBD Mix of durable vs procedure-driven demand Healthcare Support Services 7.60% TBD Reimbursement pressure is the swing factor Healthcare Info & Technology 9.10% TBD Growth/tech risk pushes WACC up Homebuilding 9.78% TBD Rates-sensitive; always run scenarios Hospitals/Healthcare Facilities 6.57% TBD Leverage + payer mix can shift WACC materially Hotel/Gaming 8.12% TBD Cyclical + high fixed costs Machinery 8.54% TBD Industrial demand cycle Metals & Mining 8.40% TBD Commodity + country risk exposure Oil/Gas (Integrated) 6.33% TBD Lower beta than E&P; transition risk still applies Oil/Gas (Production & Exploration) 7.52% TBD Commodity sensitivity + reserve risk Oilfield Services/Equipment 7.44% TBD Highly cycle-dependent Packaging & Container 7.20% TBD Defensiveness varies by end market Power 5.54% TBD Often regulated; debt-heavy structures REIT 6.62% TBD Real estate valuations are rates-sensitive Real Estate (Development) 6.58% TBD Higher risk than stabilized operators Real Estate (Ops & Services) 8.14% TBD Brokerage/management variability Restaurant/Dining 8.05% TBD Unit economics and lease profile matter Retail (General) 8.79% TBD Margin pressure + inventory risk Retail (Grocery & Food) 5.96% TBD Lower margins but steadier demand Retail (Building Supply) 11.00% TBD Highly cyclical; treat as wide range Semiconductor 10.76% TBD Capex + cycle + concentration risk Software (System & Application) 9.69% TBD Growth/retention profile drives dispersion Software (Internet) 11.10% TBD Often higher beta; validate assumptions Telecom Services 6.37% TBD Debt-heavy + regulated/competitive mix Telecom (Wireless) 6.92% TBD Spectrum + capex + pricing competition Transportation 7.72% TBD Broad bucket—match the closest comps Trucking 8.39% TBD Rates + utilization cycles Utility (General) 5.20% TBD Typically regulated; lower beta Total Market (US) 7.63% TBD Useful as a general cross-check
How to Use Industry WACC Benchmarks (Without Getting Misled)
An industry average WACC is useful when you need a quick benchmark, but it becomes dangerous when you treat it like a one-size-fits-all discount rate. Use the table the right way:
- Pick the closest industry based on revenue drivers and business model (not just the company’s label).
A “software” business with long-term contracts can behave very differently from ad-driven internet platforms. - Use it as a range, not a single “correct” number. If your company is smaller, less diversified,
or more cyclical than the industry average, the appropriate WACC is typically higher. - Recalculate WACC for your company using market-value weights (equity vs debt), an after-tax cost of debt,
and a cost of equity that matches your risk. That’s what the calculator is for. - Adjust for country risk if cash flows are exposed outside the U.S. (especially emerging markets).
Geography can matter as much as industry. - Match the discount rate to the cash flows. If you’re discounting free cash flow to the firm (FCFF),
WACC is the typical starting point. If risk differs by project/division, the discount rate should differ too.
Quick rule of thumb
If your computed WACC is far below the industry benchmark, check for common issues: overly low beta, unrealistic debt costs, missing risk premium, or using book-value weights instead of market values. If it’s far above, confirm whether the business truly carries extra risk (high customer concentration, volatile margins, weak pricing power, heavy refinancing risk, or early-stage uncertainty).
Use the WACC Calculator to compute a company-specific discount rate →
Disclaimer: Benchmarks are for educational and planning purposes. They’re not investment advice and shouldn’t replace
a company-specific analysis.