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Citizens Financial Group, Inc. (CFG) — WACC Analysis

WACC Breakdown

Citizens Financial Group, Inc. (CFG) has a weighted average cost of capital (WACC) of 12.1%. The cost of equity is 9.0%, derived from a beta of 1.00 and a risk-free rate of 4.7%. The after-tax cost of debt is 17.6%. The capital structure is 64.2% equity and 35.8% debt.

Interpretation

A WACC of 12.1% indicates that the market perceives Citizens Financial Group, Inc. as higher-risk, requiring a greater return to compensate investors.

Investors can compare CFG's WACC of 12.1% against industry peers to gauge its relative financing costs. A beta of 1.00 reflects the stock's volatility relative to the broader market.

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VALUATION

CFG WACC: 12.06% for Citizens Financial Group, Inc.

Current inputs imply a 8.96% cost of equity and a 22.32% pre-tax cost of debt. Use this discount rate as a starting point for DCF validation.

[01]Current Market Data
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[02]
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

Citizens Financial Group, Inc. Common Stock (CFG) WACC Results
Weighted Average Cost of Capital
12.06%
Cost of Equity
8.96%
Risk-Free Rate4.73%
Beta1.00
Market Risk Premium4.23%
Cost of Debt
17.63%
Pre-Tax Cost of Debt22.32%
Tax Rate21.00%
Tax Shield4.69%
Capital Structure
Equity: 64.23%($29.36B)
Debt: 35.77%($16.35B)
Equity Component
5.76%
64.23% × 8.96%
Debt Component
6.31%
35.77% × 17.63%

Citizens Financial Group, Inc. (CFG) WACC in context

Citizens Financial Group, Inc. (CFG) currently screens with an estimated WACC of 12.06%. That blends a 8.96% cost of equity, a 22.32% pre-tax cost of debt, and a 64.23% equity weight into the discount rate you would typically use in a DCF model.

screens as a relatively high discount rate, which makes valuation more sensitive to execution and capital structure risk.

What CFG WACC implies

A 12.06% discount rate screens as a relatively high discount rate, which makes valuation more sensitive to execution and capital structure risk.

How this page calculates CFG

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 1.00 and equity accounts for 64.23% 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.