FMBH
First Mid Bancshares Inc
Price:  
33.56 
USD
Volume:  
46,989.00
United States | Banks
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FMBH WACC - Weighted Average Cost of Capital

The WACC of First Mid Bancshares Inc (FMBH) is 7.6%.

The Cost of Equity of First Mid Bancshares Inc (FMBH) is 9.00%.
The Cost of Debt of First Mid Bancshares Inc (FMBH) is 5.00%.

Range Selected
Cost of equity 7.90% - 10.10% 9.00%
Tax rate 22.60% - 23.50% 23.05%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.8% - 8.3% 7.6%
WACC

FMBH WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.89 0.93
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.90% 10.10%
Tax rate 22.60% 23.50%
Debt/Equity ratio 0.39 0.39
Cost of debt 5.00% 5.00%
After-tax WACC 6.8% 8.3%
Selected WACC 7.6%

FMBH'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 FMBH:

cost_of_equity (9.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * 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.