The KPMG Cost of Capital Study is an annual empirical study that provides information on how current economic developments affect the business models, planning calculations and long-term return expectations (cost of capital) of companies in the DACH region. The high annual coverage of the KPMG Cost of Capital Study emphasises the great practical benefit that this study offers companies.
Current topics and trends 2025
In the 20th edition – of the anniversary edition of our cost of capital study – entitled "Between past and future: Bridging empirical yields with return & growth expectations", we analyse the relationship between historical and implied returns. The focus is on the influence of growth expectations on the implicit market risk premiums, taking into account the implicit return requirements of the markets - in the context of different business models and company developments.
Europe under pressure:
Central bank autonomy, debt and AI innovation will characterise the continent's economic development.
Empirical returns:
Will regional differences persist in the long term?
Estimation of implicit returns:
Are differences due to risk assessments or growth expectations?
Europe under pressure:
Central bank autonomy, debt and AI innovation will characterise the continent's economic development.
Empirical returns:
Will regional differences persist in the long term?
Estimation of implicit returns:
Are differences due to risk assessments or growth expectations?
Cost of capital parameters 2025
WACC
Betafactor
Total return
Cost of equity
Borrowing costs
Debt ratio
WACC
In the current period under review, the participating companies applied a weighted average cost of capital (WACC) ranging from 5.2 per cent to 10.4 per cent. The average WACC across all sectors is 8.5 per cent, which represents a slight increase compared to the previous year (8.2 per cent).
Comparatively high WACCs were recorded on average in the Industrial Manufacturing (9.4 per cent), Technology (9.4 per cent) and Automotive (9.0 per cent) sectors, while the Energy & Natural Resources (6.3 per cent) and Real Estate (7.0 per cent) sectors had the lowest average WACCs.
More details in the current Studie.
Betafactor
During the survey period, the indebtedness beta factors of the participating companies ranged between 0.72 and 1.33, with an average value of 1.03 (previous year: 1.05).
The highest average leveraged beta factors were observed in the Automotive (1.25), Industrial Manufacturing (1.15) and Technology (1.07) sectors. Energy & Natural Resources (0.87), Healthcare (0.92) and Media & Telecommunications (0.94) have the lowest average leveraged beta factors in comparison.
More details in the current Studie.
Total return
During the survey period, the risk-free base rate used by the participating companies in Germany and Austria was 2.5 per cent in each case (previous year: 2.6 per cent). In Switzerland, the average base rate used rose to 2.6 per cent (previous year: 1.8 per cent)
The average market risk premium applied by the participating companies in Germany and Switzerland fell by 0.1 percentage points year-on-year to 6.7 per cent and 6.0 per cent respectively. The market risk premium in Austria has not changed compared to the previous year and remains at 6.7 per cent.
This results in an average expected total return in the survey period of 9.2 per cent in Germany and Austria and 8.6 per cent in Switzerland.
More details in the current Studie.
Cost of equity
During the survey period, the participating companies' borrowed capital costs ranged between 7.2 per cent and 12.9 per cent, with an average value across all sectors of 9.7 per cent (previous year: 9.8 per cent).
At an average of 11.6 per cent, the highest borrowing costs of equity can be observed in the automotive sector. The lowest average debt-equity costs were recorded in the Real Estate sector at 8.2 per cent and the Energy & Natural Resources sector at 8.3 per cent.
More details in the current Studie.
Borrowing costs
The borrowing costs of the participating companies were between 3.4 per cent and 5.5 per cent across all sectors. On average, the borrowing costs applied were 4.3 per cent, which represents a reduction of 0.1 percentage points compared to the previous year.
The healthcare sector has the highest average borrowing costs at 4.9 per cent, while the energy & natural resources and real estate sectors have the lowest (3.6 per cent each).
More details in the current Studie.
Debt ratio
The debt capital ratios reported by the participating companies vary considerably depending on the sector, which is why the range of debt capital ratios extends from 4.0 per cent to 48.1 per cent. Across all sectors, the average debt ratio is 23.5 per cent (previous year: 28.5 per cent).
The Energy & Natural Resources sector (37.3 per cent) has the highest average debt ratios in comparison, while the Technology sector (12.3 per cent) has the lowest average debt ratios. The high debt ratio in the Energy & Natural Resources sector can certainly also be explained by the sector's high investment requirements.
More details in the current Studie.
Impairment Test
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