EQFN
Equitable Financial Corp
Price:  
12.85 
USD
Volume:  
1,100.00
United States | Thrifts & Mortgage Finance
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EQFN WACC - Weighted Average Cost of Capital

The WACC of Equitable Financial Corp (EQFN) is 6.5%.

The Cost of Equity of Equitable Financial Corp (EQFN) is 6.55%.
The Cost of Debt of Equitable Financial Corp (EQFN) is 5.00%.

Range Selected
Cost of equity 5.50% - 7.60% 6.55%
Tax rate 33.90% - 35.50% 34.70%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.5% - 7.5% 6.5%
WACC

EQFN WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.36 0.48
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.50% 7.60%
Tax rate 33.90% 35.50%
Debt/Equity ratio 0.01 0.01
Cost of debt 5.00% 5.00%
After-tax WACC 5.5% 7.5%
Selected WACC 6.5%

EQFN'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 EQFN:

cost_of_equity (6.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.36) + 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.