As of today (2026-07-03), Shinhan Financial Group Co's weighted average cost of capital is 9.55%%. Shinhan Financial Group Co's ROIC % is 0.00% (calculated using TTM income statement data).
Shinhan Financial Group Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.
For a comprehensive WACC calculation, please access the WACC Calculator.
Shinhan Financial Group Co (FRA:KSF1) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Shinhan Financial Group Co's weighted average cost of capital is 9.55%%. Shinhan Financial Group Co's ROIC % is 0.00% (calculated using TTM income statement data).
Shinhan Financial Group Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Shinhan Financial Group Co WACC % Competitor Comparison
For the Banks - Regional subindustry, Shinhan Financial Group Co's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Shinhan Financial Group Co WACC % vs Banks Industry
For the Banks industry and Financial Services sector, Shinhan Financial Group Co's WACC % distribution charts can be found below:
* The bar in red indicates where Shinhan Financial Group Co's WACC % falls into.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Shinhan Financial Group Co's market capitalization (E) is €26132.730 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Mar. 2026, Shinhan Financial Group Co's latest one-year quarterly average Book Value of Debt (D) is €81095.2802 Mil.
a) weight of equity = E / (E + D) = 26132.730 / (26132.730 + 81095.2802) = 0.2437
b) weight of debt = D / (E + D) = 81095.2802 / (26132.730 + 81095.2802) = 0.7563
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.075%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Shinhan Financial Group Co's beta is 1.3230.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.075% + 1.3230 * 6% = 12.013%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Mar. 2026, Shinhan Financial Group Co's interest expense (positive number) was €9719.825 Mil. Its total Book Value of Debt (D) is €81095.2802 Mil.
Cost of Debt = 9719.825 / 81095.2802 = 11.9857%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 1162.729 / 4323.662 = 26.89%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Shinhan Financial Group Co (FRA:KSF1) has a WACC % of 9.55% as of Jul. 03, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Shinhan Financial Group Co and its competitors. This is 76% above median its historical median of 5.44. Over the past decade, Shinhan Financial Group Co's WACC % has ranged from 3.21 to 10.15. According to the industry distribution chart, Shinhan Financial Group Co ranks #335 out of 1544 companies in the Banks industry, placing it in the top 21.7%.
Is Shinhan Financial Group Co's WACC % too high?
Shinhan Financial Group Co's current WACC % of 9.55% is 76% above median its 10-year median of 5.44. Over the past 10 years, this metric has ranged from a low of 3.21 to a high of 10.15. The Banks industry median WACC % is 13.18. Shinhan Financial Group Co's value of 9.55% is 27.5% below this industry median. Based on the distribution chart, Shinhan Financial Group Co ranks #335 out of 1544 companies in the Banks industry, which is in the top quartile — a strong position relative to peers. Overall, Shinhan Financial Group Co has a GF Score™ of 46/100, reflecting its overall financial health beyond just this single metric.
How does Shinhan Financial Group Co's WACC % compare to competitors?
According to the Banks industry distribution chart, Shinhan Financial Group Co ranks #335 out of 1544 companies for WACC %. This places Shinhan Financial Group Co in the top 22% of its industry — outperforming the majority of peers. The industry median WACC % is 13.18. Shinhan Financial Group Co's value of 9.55% is 27.5% below this benchmark. Historically, Shinhan Financial Group Co's own WACC % has ranged from 3.21 to 10.15 over the past decade. While the company's 10-year median is 5.44 vs. the industry median of 13.18, Shinhan Financial Group Co has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for a Banks company?
The median WACC % among Banks companies is 13.18, based on 1,544 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Shinhan Financial Group Co's current WACC % of 9.55% is 27.5% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Shinhan Financial Group Co and its competitors. For the Banks industry, the median WACC % is 13.18 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Shinhan Financial Group Co's current WACC % is 9.55%, which is 76% above median its own 10-year median of 5.44. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Shinhan Financial Group Co stock overvalued right now?
Shinhan Financial Group Co (FRA:KSF1) has a current WACC % of 9.55%. The stock's GF Value™ is €30.03, compared to a current price of €55.50 — trading 84.8% above its estimated fair value. The current WACC % is 9.55%, which is 76% above median its 10-year median of 5.44 and 27.5% below the Banks industry median of 13.18. Shinhan Financial Group Co's overall GF Score™ is 46/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For Shinhan Financial Group Co (FRA:KSF1), the current WACC % is 9.55% as of Jul. 03, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Shinhan Financial Group Co (FRA:KSF1) Overvalued in 2026?
Based on GuruFocus' analysis, Shinhan Financial Group Co stock appears to be overvalued.
The current stock price of €55.50 is trading 84.8% above its estimated GF Value™ of €30.03.
Key valuation signals for FRA:KSF1:
WACC %: 9.55% (76% above median its 10-year median of 5.44)
GF Value™: €30.03 vs. price of €55.50 (84.8% above fair value)
Industry Position: 27.5% below the Banks median (#335 of 1544)
No single metric tells the full story. See the FRA:KSF1 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Shinhan Financial Group Co Ltd is a Korean banking group. Along with its subsidiaries the company provides, comprehensive financial services which consist of commercial banking services, credit card services, securities services, insurance, credit services, and asset management services, including securities investment trust management, investment advisory, call transaction, domestic and foreign private equity fund business, and other services. The majority of the revenue is generated from its Banking business which includes retail, corporate, international, and other banking services the company offers.
46GF Score
Get the complete analysis for FRA:KSF1
WACC % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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