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State Street Corporation (STT) — WACC Analysis

WACC Breakdown

State Street Corporation (STT) has a weighted average cost of capital (WACC) of 14.3%. The cost of equity is 9.3%, derived from a beta of 1.13 and a risk-free rate of 4.7%. The after-tax cost of debt is 24.4%. The capital structure is 67.4% equity and 32.6% debt.

Interpretation

A WACC of 14.3% indicates that the market perceives State Street Corporation as higher-risk, requiring a greater return to compensate investors.

Investors can compare STT's WACC of 14.3% against industry peers to gauge its relative financing costs. A beta of 1.13 reflects the stock's volatility relative to the broader market.

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VALUATION

STT WACC: 14.25% for State Street Corporation

Current inputs imply a 9.33% cost of equity and a 30.93% 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

State Street Corporation Common Stock (STT) WACC Results
Weighted Average Cost of Capital
14.25%
Cost of Equity
9.33%
Risk-Free Rate4.73%
Beta1.13
Market Risk Premium4.23%
Cost of Debt
24.43%
Pre-Tax Cost of Debt30.93%
Tax Rate21.00%
Tax Shield6.49%
Capital Structure
Equity: 67.39%($53.11B)
Debt: 32.61%($25.70B)
Equity Component
6.28%
67.39% × 9.33%
Debt Component
7.97%
32.61% × 24.43%

State Street Corporation (STT) WACC in context

State Street Corporation (STT) currently screens with an estimated WACC of 14.25%. That blends a 9.33% cost of equity, a 30.93% pre-tax cost of debt, and a 67.39% 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 STT WACC implies

A 14.25% discount rate screens as a relatively high discount rate, which makes valuation more sensitive to execution and capital structure risk.

How this page calculates STT

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 1.13 and equity accounts for 67.39% 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.