BCTF
Bancorp 34 Inc
Price:  
12.01 
USD
Volume:  
970.00
United States | Thrifts & Mortgage Finance
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BCTF WACC - Weighted Average Cost of Capital

The WACC of Bancorp 34 Inc (BCTF) is 5.7%.

The Cost of Equity of Bancorp 34 Inc (BCTF) is 6.30%.
The Cost of Debt of Bancorp 34 Inc (BCTF) is 5.00%.

Range Selected
Cost of equity 5.30% - 7.30% 6.30%
Tax rate 17.80% - 23.30% 20.55%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.0% - 6.4% 5.7%
WACC

BCTF WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.32 0.44
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.30% 7.30%
Tax rate 17.80% 23.30%
Debt/Equity ratio 0.34 0.34
Cost of debt 5.00% 5.00%
After-tax WACC 5.0% 6.4%
Selected WACC 5.7%

BCTF'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 BCTF:

cost_of_equity (6.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.32) + 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.