CNBKA
Century Bancorp Inc
Price:  
115.29 
USD
Volume:  
11,507.00
United States | Banks
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

CNBKA WACC - Weighted Average Cost of Capital

The WACC of Century Bancorp Inc (CNBKA) is 6.9%.

The Cost of Equity of Century Bancorp Inc (CNBKA) is 8.05%.
The Cost of Debt of Century Bancorp Inc (CNBKA) is 5.00%.

Range Selected
Cost of equity 6.90% - 9.20% 8.05%
Tax rate 3.60% - 5.50% 4.55%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.2% - 7.6% 6.9%
WACC

CNBKA WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 4.2% 5.2%
Adjusted beta 0.89 0.95
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.90% 9.20%
Tax rate 3.60% 5.50%
Debt/Equity ratio 0.52 0.52
Cost of debt 5.00% 5.00%
After-tax WACC 6.2% 7.6%
Selected WACC 6.9%

CNBKA'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 CNBKA:

cost_of_equity (8.05%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.89) + 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.