CASH WACC - Weighted Average Cost of Capital
The WACC of Meta Financial Group Inc (CASH) is 8.5%.
| Range | Selected | |
| Cost of equity | 8.2% - 10.4% | 9.3% |
| Tax rate | 8.1% - 11.2% | 9.65% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.6% - 9.4% | 8.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.94 | 0.99 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.2% | 10.4% |
| Tax rate | 8.1% | 11.2% |
| Debt/Equity ratio | 0.21 | 0.21 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.6% | 9.4% |
| Selected WACC | 8.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CASH | Meta Financial Group Inc | 0.21 | 1.02 | 0.86 |
| HMST | HomeStreet Inc | 3.41 | 0.21 | 0.05 |
| KRNY | Kearny Financial Corp | 0.24 | 0.99 | 0.81 |
| MBIN | Merchants Bancorp | 0.15 | 0.91 | 0.8 |
| NFBK | Northfield Bancorp Inc | 0.14 | 1.11 | 0.98 |
| NMIH | NMI Holdings Inc | 0.14 | 0.58 | 0.51 |
| NWBI | Northwest Bancshares Inc | 0.15 | 0.69 | 0.6 |
| PFS | Provident Financial Services Inc | 0.23 | 0.86 | 0.71 |
| SMBC | Southern Missouri Bancorp Inc | 0.04 | 1.02 | 0.99 |
| SNFCA | Security National Financial Corp | 0.44 | 1.52 | 1.08 |
| Low | High | |
| Unlevered beta | 0.77 | 0.83 |
| Relevered beta | 0.91 | 0.99 |
| Adjusted relevered beta | 0.94 | 0.99 |
CASH'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 CASH:
cost_of_equity (9.30%) = 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.