GSBC
Great Southern Bancorp Inc
Price:  
54.79 
USD
Volume:  
67,963.00
United States | Banks
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GSBC WACC - Weighted Average Cost of Capital

The WACC of Great Southern Bancorp Inc (GSBC) is 7.9%.

The Cost of Equity of Great Southern Bancorp Inc (GSBC) is 8.90%.
The Cost of Debt of Great Southern Bancorp Inc (GSBC) is 5.00%.

Range Selected
Cost of equity 7.80% - 10.00% 8.90%
Tax rate 19.20% - 19.90% 19.55%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.1% - 8.7% 7.9%
WACC

GSBC WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.86 0.91
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.80% 10.00%
Tax rate 19.20% 19.90%
Debt/Equity ratio 0.26 0.26
Cost of debt 5.00% 5.00%
After-tax WACC 7.1% 8.7%
Selected WACC 7.9%

GSBC'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 GSBC:

cost_of_equity (8.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.86) + 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.