Cost of capital by industry

94 U.S. industries, highest first · January 2026

Median industry7.1%half are above, half below

Highest10.7%Software (Internet)

Lowest4.4%Utility (General)

#	Industry	Cost of capital	Cost of equity	Companies
1	Software (Internet)	10.7%	11.5%	29
2	Semiconductor	10.5%	10.7%	66
3	Semiconductor Equipment	9.9%	10.2%	31
4	Computers/Peripherals	9.7%	10.0%	36
5	Retail (Building Supply)	9.5%	10.8%	14
6	Auto & Truck	9.4%	10.4%	33
7	Software (System & Application)	9.3%	9.6%	309
8	Electrical Equipment	9.0%	9.5%	112
9	Engineering/Construction	8.7%	9.3%	48
10	Drugs (Biotechnology)	8.5%	9.0%	496
11	Software (Entertainment)	8.4%	8.5%	77
12	Coal & Related Energy	8.4%	8.7%	16
13	Construction Supplies	8.3%	9.1%	40
14	Healthcare Information and Technology	8.2%	8.9%	115
15	Metals & Mining	8.2%	8.6%	73
16	Auto Parts	8.2%	9.9%	35
17	Retail (Special Lines)	8.0%	8.8%	94
18	Shoe	8.0%	8.5%	11
19	Office Equipment & Services	7.9%	9.9%	14
20	Building Materials	7.8%	8.9%	41
21	Drugs (Pharmaceutical)	7.8%	8.3%	228
22	Electronics (General)	7.8%	8.3%	114
23	Computer Services	7.8%	8.8%	64
24	Advertising	7.8%	9.3%	52
25	Steel	7.8%	8.7%	19
26	Telecom Equipment	7.7%	8.1%	57
27	Machinery	7.7%	8.3%	105
28	Electronics (Consumer & Office)	7.6%	7.8%	8
29	Aerospace/Defense	7.6%	8.2%	79
30	Healthcare Products	7.5%	8.0%	204
31	Trucking	7.5%	8.5%	26
32	Precious Metals	7.5%	7.7%	56
33	Environmental & Waste Services	7.4%	8.2%	53
34	Real Estate (Operations & Services)	7.4%	8.3%	54
35	Hotel/Gaming	7.4%	8.8%	63
36	Diversified	7.3%	7.9%	20
37	Farming/Agriculture	7.3%	9.0%	35
38	Homebuilding	7.3%	8.0%	30
39	Retail (General)	7.3%	7.5%	23
40	Transportation (Railroads)	7.3%	8.3%	4
41	Chemical (Specialty)	7.2%	8.3%	59
42	Retail (Grocery and Food)	7.2%	8.9%	15
43	Business & Consumer Services	7.2%	7.9%	155
44	Retail (Distributors)	7.2%	8.2%	62
45	Restaurant/Dining	7.2%	8.1%	64
46	Apparel	7.1%	8.1%	35
47	Entertainment	7.1%	7.6%	92
48	Oilfield Services/Equipment	7.0%	8.2%	97
49	Household Products	7.0%	7.6%	110
50	Information Services	7.0%	8.1%	15
51	Tobacco	6.9%	7.5%	10
52	Paper/Forest Products	6.9%	8.2%	6
53	Healthcare Support Services	6.8%	7.8%	104
54	Retail (Automotive)	6.8%	8.1%	34
55	Recreation	6.8%	8.5%	49
56	Education	6.8%	7.4%	32
57	Packaging & Container	6.8%	8.5%	19
58	Air Transport	6.7%	9.2%	23
59	Transportation	6.7%	7.8%	19
60	Shipbuilding & Marine	6.7%	7.3%	8
61	Food Wholesalers	6.5%	7.8%	13
62	Furn/Home Furnishings	6.5%	7.6%	27
63	Beverage (Alcoholic)	6.5%	7.6%	14
64	Insurance (General)	6.3%	7.0%	21
65	Beverage (Soft)	6.3%	6.8%	27
66	Oil/Gas (Production and Exploration)	6.3%	7.2%	142
67	Real Estate (General/Diversified)	6.3%	7.6%	12
68	Chemical (Basic)	6.2%	8.5%	29
69	Hospitals/Healthcare Facilities	6.2%	7.5%	31
70	Investments & Asset Management	6.1%	6.9%	283
71	Brokerage & Investment Banking	6.1%	9.2%	32
72	Green & Renewable Energy	6.0%	7.8%	15
73	Publishing & Newspapers	5.9%	6.5%	19
74	Real Estate (Development)	5.8%	7.7%	14
75	Food Processing	5.8%	6.7%	78
76	Insurance (Prop/Cas.)	5.8%	6.1%	57
77	Oil/Gas Distribution	5.8%	6.9%	23
78	Reinsurance	5.6%	6.5%	1
79	Insurance (Life)	5.6%	6.8%	20
80	Retail (REITs)	5.6%	6.7%	26
81	Telecom (Wireless)	5.5%	6.3%	12
82	Telecom Services	5.4%	6.8%	39
83	REITs	5.3%	6.8%	190
84	Chemical (Diversified)	5.2%	7.7%	4
85	Cable TV	5.2%	7.2%	9
86	Broadcasting	5.1%	6.0%	24
87	Oil/Gas (Integrated)	5.1%	5.3%	4
88	Power	5.0%	6.1%	46
89	Financial Services (Non-bank & Insurance)	5.0%	8.3%	176
90	Bank (Money Center)	5.0%	7.3%	15
91	Banks (Regional)	5.0%	5.7%	568
92	Utility (Water)	4.9%	5.8%	14
93	Rubber & Tires	4.5%	6.3%	3
94	Utility (General)	4.4%	5.0%	14

Source: Aswath Damodaran, NYU Stern, January 2026. Aggregates over U.S. public companies.

Frequently asked questions

What is a good cost of capital?

It depends on the industry: the median across these 94 industries is 7.1%, from Utility (General) (4.4%) to Software (Internet) (10.7%). Compare a business with its own industry, not with the overall average.

How is the cost of capital calculated?

The blended yearly return investors and lenders expect from a company in the industry, often used as a discount rate. Each figure is an aggregate: the total across every company in the industry, so larger companies weigh more than in a simple average.

Where does the data come from?

Aswath Damodaran’s datasets at NYU Stern, January 2026, covering thousands of U.S. public companies in 94 industries. It is refreshed each January.