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Black Hills Corporation (BKH) — WACC Analysis

WACC Breakdown

Black Hills Corporation (BKH) has a weighted average cost of capital (WACC) of 6.1%. The cost of equity is 7.5%, derived from a beta of 0.39 and a risk-free rate of 5.0%. The after-tax cost of debt is 3.9%. The capital structure is 60.3% equity and 39.7% debt.

Interpretation

A WACC of 6.1% suggests that the market views Black Hills Corporation as relatively low-risk, with a lower cost of financing.

Investors can compare BKH's WACC of 6.1% against industry peers to gauge its relative financing costs. A beta of 0.39 reflects the stock's volatility relative to the broader market.

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VALUATION

BKH WACC: 6.08% for Black Hills Corporation

Current inputs imply a 7.49% cost of equity and a 4.98% pre-tax cost of debt. Use this discount rate as a starting point for DCF validation.

[01]Current Market Data
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WACC Calculation Process
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Market Data Loaded
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Company Data Fetched
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Beta Calculated (5Y)
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Inputs Auto-Populated
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WACC Calculated
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Step 2: Enter Ticker Symbol
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Step 4: Review Auto-Populated WACC Inputs

Values are automatically populated from real data. You can adjust them manually if needed.

4.30%
1.000
4.23%
5.00%
21.00%
70.00%
Debt: 30.00%Equity: 70.00%

Please enter a valid company ticker to calculate WACC

Black Hills Corporation Common Stock (BKH) WACC Results
Weighted Average Cost of Capital
6.08%
Cost of Equity
7.49%
Risk-Free Rate4.98%
Beta0.39
Market Risk Premium4.23%
Cost of Debt
3.93%
Pre-Tax Cost of Debt4.98%
Tax Rate21.00%
Tax Shield1.05%
Capital Structure
Equity: 60.33%($6211.58M)
Debt: 39.67%($4083.90M)
Equity Component
4.52%
60.33% × 7.49%
Debt Component
1.56%
39.67% × 3.93%

Black Hills Corporation (BKH) WACC in context

Black Hills Corporation (BKH) currently screens with an estimated WACC of 6.08%. That blends a 7.49% cost of equity, a 4.98% pre-tax cost of debt, and a 60.33% equity weight into the discount rate you would typically use in a DCF model.

screens as a relatively low discount rate, which usually supports higher DCF values.

What BKH WACC implies

A 6.08% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates BKH

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.39 and equity accounts for 60.33% of capital.

What to do next

Validate business quality on the company page, then carry the same discount-rate assumptions into the DCF page to test fair value sensitivity.

Disclaimer: This is not financial advice. Data sourced from SEC EDGAR and Polygon.io. Past performance does not guarantee future results. Always conduct your own research before making investment decisions.