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, source: NYU Stern/Damodaran Cost of Capital). 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% 7.81% Good baseline for agencies/marketing services Aerospace/Defense 7.68% 7.60% Often steadier cash flows; adjust for contract concentration Air Transport 7.29% 6.72% Cyclical + leverage sensitive; treat as a range Apparel 7.44% 7.13% Brand strength can materially shift WACC up/down Auto & Truck 10.34% 9.38% High operating leverage; validate beta assumptions Auto Parts 8.09% 8.18% Supplier dependency matters a lot Bank (Money Center) 5.64% 4.98% Banks are special cases—don’t force a standard WACC if valuing equity Banks (Regional) 5.69% 4.98% Same caveat as above Beverage (Alcoholic) 6.55% 6.48% Often resilient demand; confirm leverage Beverage (Soft) 6.59% 6.33% Defensive profile; adjust for geography Broadcasting 6.03% 5.09% Ad cycle exposure Brokerage & Investment Banking 5.74% 6.08% Financials caveat applies Building Materials 9.46% 7.85% Cyclical; stress-test with higher WACC Business & Consumer Services 8.27% 7.23% Broad bucket—match comps where possible Cable TV 6.28% 5.20% Legacy cash flows vs churn risk Chemical (Basic) 7.63% 6.22% Commodity exposure Chemical (Specialty) 7.67% 7.25% Moats can lower WACC vs basic chemicals Coal & Related Energy 9.23% 8.41% Regulatory + transition risk Computer Services 8.72% 7.83% Services often lower than pure product risk Computers/Peripherals 9.29% 9.71% Hardware cyclicality Drugs (Biotechnology) 9.37% 8.49% Stage of pipeline matters more than “industry” Drugs (Pharmaceutical) 8.72% 7.85% Patent cliffs + pricing risk Education 8.10% 6.75% Business model sensitivity (B2C vs B2B vs regulated) Electrical Equipment 9.40% 8.99% Industrial cycle exposure Electronics (General) 8.55% 7.85% Supply chain + pricing power are key drivers Engineering/Construction 8.17% 8.69% Project risk → consider project-specific adjustments Entertainment 8.28% 7.13% Hit-driven revenue volatility Environmental & Waste Services 7.88% 7.43% Often stable with long contracts Green & Renewable Energy 6.50% 6.04% Project finance + subsidy/regulatory sensitivity Healthcare Products 8.50% 7.54% Mix of durable vs procedure-driven demand Healthcare Support Services 7.60% 6.83% Reimbursement pressure is the swing factor Healthcare Info & Technology 9.10% 8.22% Growth/tech risk pushes WACC up Homebuilding 9.78% 7.27% Rates-sensitive; always run scenarios Hospitals/Healthcare Facilities 6.57% 6.19% Leverage + payer mix can shift WACC materially Hotel/Gaming 8.12% 7.36% Cyclical + high fixed costs Machinery 8.54% 7.70% Industrial demand cycle Metals & Mining 8.40% 8.20% Commodity + country risk exposure Oil/Gas (Integrated) 6.33% 5.07% Lower beta than E&P; transition risk still applies Oil/Gas (Production & Exploration) 7.52% 6.25% Commodity sensitivity + reserve risk Oilfield Services/Equipment 7.44% 7.04% Highly cycle-dependent Packaging & Container 7.20% 6.75% Defensiveness varies by end market Power 5.54% 5.01% Often regulated; debt-heavy structures REIT 6.62% 5.32% Real estate valuations are rates-sensitive Real Estate (Development) 6.58% 5.82% Higher risk than stabilized operators Real Estate (Ops & Services) 8.14% 7.41% Brokerage/management variability Restaurant/Dining 8.05% 7.16% Unit economics and lease profile matter Retail (General) 8.79% 7.27% Margin pressure + inventory risk Retail (Grocery & Food) 5.96% 7.24% Lower margins but steadier demand Retail (Building Supply) 11.00% 9.51% Highly cyclical; treat as wide range Semiconductor 10.76% 10.55% Capex + cycle + concentration risk Software (System & Application) 9.69% 9.34% Growth/retention profile drives dispersion Software (Internet) 11.10% 10.66% Often higher beta; validate assumptions Telecom Services 6.37% 5.39% Debt-heavy + regulated/competitive mix Telecom (Wireless) 6.92% 5.48% Spectrum + capex + pricing competition Transportation 7.72% 6.72% Broad bucket—match the closest comps Trucking 8.39% 7.52% Rates + utilization cycles Utility (General) 5.20% 4.36% Typically regulated; lower beta Total Market (US) 7.63% 6.96% 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.