AMAL
Amalgamated Bank
Price:  
32.62 
USD
Volume:  
154,760
United States | Banks

AMAL WACC - Weighted Average Cost of Capital

The WACC of Amalgamated Bank (AMAL) is 8.2%.

The Cost of Equity of Amalgamated Bank (AMAL) is 9.55%.
The Cost of Debt of Amalgamated Bank (AMAL) is 5%.

RangeSelected
Cost of equity8.4% - 10.7%9.55%
Tax rate25.4% - 26.1%25.75%
Cost of debt5.0% - 5.0%5%
WACC7.3% - 9.1%8.2%
WACC

AMAL WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.981.05
Additional risk adjustments0.0%0.5%
Cost of equity8.4%10.7%
Tax rate25.4%26.1%
Debt/Equity ratio
0.320.32
Cost of debt5.0%5.0%
After-tax WACC7.3%9.1%
Selected WACC8.2%

AMAL's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for AMAL:

cost_of_equity (9.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.98) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.