BCSF
Bain Capital Specialty Finance Inc
Price:  
15.42 
USD
Volume:  
341,633.00
United States | Capital Markets
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BCSF WACC - Weighted Average Cost of Capital

The WACC of Bain Capital Specialty Finance Inc (BCSF) is 8.2%.

The Cost of Equity of Bain Capital Specialty Finance Inc (BCSF) is 10.55%.
The Cost of Debt of Bain Capital Specialty Finance Inc (BCSF) is 6.70%.

Range Selected
Cost of equity 7.50% - 13.60% 10.55%
Tax rate 1.70% - 2.50% 2.10%
Cost of debt 4.30% - 9.10% 6.70%
WACC 5.6% - 10.9% 8.2%
WACC

BCSF WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.79 1.57
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.50% 13.60%
Tax rate 1.70% 2.50%
Debt/Equity ratio 1.39 1.39
Cost of debt 4.30% 9.10%
After-tax WACC 5.6% 10.9%
Selected WACC 8.2%

BCSF'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 BCSF:

cost_of_equity (10.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.79) + 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.