Alliance Data Systems Corp (ADS) WACC Analysis

As of December 15, 2025, Alliance Data Systems Corp (ADS) carries a Weighted Average Cost of Capital (WACC) of 5.2%. WACC reflects the blended rate Alliance Data Systems Corp must pay to both equity and debt holders.

Within that, the cost of equity is 15.0%, the cost of debt is 4.0%, and the effective tax rate is 25.0%.

Breakdown of WACC Components

• Long-term bond rate: 3.2% – 3.7%
• Equity market risk premium: 4.2% – 5.2%
• Adjusted beta: 2.79 – 3.29
• Additional risk adjustment: 0.0% – 0.5%
• Debt-to-equity ratio: 6.51

What It Means for Investors

With a selected WACC of 5.2%, Alliance Data Systems Corp must ensure any new investment returns exceed this threshold to generate shareholder value. This level reflects an attractive low cost of capital.