ASB
Associated Banc-Corp
Price:  
25.23 
USD
Volume:  
1,574,699.00
United States | Banks
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ASB WACC - Weighted Average Cost of Capital

The WACC of Associated Banc-Corp (ASB) is 8.4%.

The Cost of Equity of Associated Banc-Corp (ASB) is 9.65%.
The Cost of Debt of Associated Banc-Corp (ASB) is 5.00%.

Range Selected
Cost of equity 8.20% - 11.10% 9.65%
Tax rate 10.10% - 14.50% 12.30%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.3% - 9.5% 8.4%
WACC

ASB WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.94 1.12
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.20% 11.10%
Tax rate 10.10% 14.50%
Debt/Equity ratio 0.31 0.31
Cost of debt 5.00% 5.00%
After-tax WACC 7.3% 9.5%
Selected WACC 8.4%

ASB'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 ASB:

cost_of_equity (9.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.94) + 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.