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Texas Capital Bancshares, Inc. (TCBI) — WACC Analysis

WACC Breakdown

Texas Capital Bancshares, Inc. (TCBI) has a weighted average cost of capital (WACC) of 20.0%. The cost of equity is 9.2%, derived from a beta of 1.00 and a risk-free rate of 5.0%. The after-tax cost of debt is 160.2%. The capital structure is 92.4% equity and 7.6% debt.

Interpretation

A WACC of 20.0% indicates that the market perceives Texas Capital Bancshares, Inc. as higher-risk, requiring a greater return to compensate investors.

Investors can compare TCBI's WACC of 20.0% 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

TCBI WACC: 20.00% for Texas Capital Bancshares, Inc.

Current inputs imply a 9.19% cost of equity and a 202.76% 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

Texas Capital Bancshares, Inc. Common Stock (TCBI) WACC Results
Weighted Average Cost of Capital
20.00%
Cost of Equity
9.19%
Risk-Free Rate4.96%
Beta1.00
Market Risk Premium4.23%
Cost of Debt
160.18%
Pre-Tax Cost of Debt202.76%
Tax Rate21.00%
Tax Shield42.58%
Capital Structure
Equity: 92.44%($4279.62M)
Debt: 7.56%($350.00M)
Equity Component
8.50%
92.44% × 9.19%
Debt Component
12.11%
7.56% × 160.18%

Texas Capital Bancshares, Inc. (TCBI) WACC in context

Texas Capital Bancshares, Inc. (TCBI) currently screens with an estimated WACC of 20.00%. That blends a 9.19% cost of equity, a 202.76% pre-tax cost of debt, and a 92.44% 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 TCBI WACC implies

A 20.00% discount rate screens as a relatively high discount rate, which makes valuation more sensitive to execution and capital structure risk.

How this page calculates TCBI

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 92.44% 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.