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SYNCHRONY FINANCIAL (SYF) — WACC Analysis

WACC Breakdown

SYNCHRONY FINANCIAL (SYF) has a weighted average cost of capital (WACC) of 12.9%. 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 18.9%. The capital structure is 60.4% equity and 39.6% debt.

Interpretation

A WACC of 12.9% indicates that the market perceives SYNCHRONY FINANCIAL as higher-risk, requiring a greater return to compensate investors.

Investors can compare SYF's WACC of 12.9% 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

SYF WACC: 12.89% for SYNCHRONY FINANCIAL

Current inputs imply a 8.96% cost of equity and a 23.90% 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
[03]
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

SYNCHRONY FINANCIAL Common Stock (SYF) WACC Results
Weighted Average Cost of Capital
12.89%
Cost of Equity
8.96%
Risk-Free Rate4.73%
Beta1.00
Market Risk Premium4.23%
Cost of Debt
18.88%
Pre-Tax Cost of Debt23.90%
Tax Rate21.00%
Tax Shield5.02%
Capital Structure
Equity: 60.42%($25.08B)
Debt: 39.58%($16.43B)
Equity Component
5.41%
60.42% × 8.96%
Debt Component
7.47%
39.58% × 18.88%

SYNCHRONY FINANCIAL (SYF) WACC in context

SYNCHRONY FINANCIAL (SYF) currently screens with an estimated WACC of 12.89%. That blends a 8.96% cost of equity, a 23.90% pre-tax cost of debt, and a 60.42% 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 SYF WACC implies

A 12.89% discount rate screens as a relatively high discount rate, which makes valuation more sensitive to execution and capital structure risk.

How this page calculates SYF

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 60.42% 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.