JEF
Jefferies Financial Group Inc
Price:  
50.36 
USD
Volume:  
1,176,480.00
United States | Diversified Financial Services
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JEF WACC - Weighted Average Cost of Capital

The WACC of Jefferies Financial Group Inc (JEF) is 6.8%.

The Cost of Equity of Jefferies Financial Group Inc (JEF) is 10.40%.
The Cost of Debt of Jefferies Financial Group Inc (JEF) is 7.65%.

Range Selected
Cost of equity 8.20% - 12.60% 10.40%
Tax rate 25.90% - 26.80% 26.35%
Cost of debt 7.00% - 8.30% 7.65%
WACC 5.9% - 7.7% 6.8%
WACC

JEF WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.94 1.38
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.20% 12.60%
Tax rate 25.90% 26.80%
Debt/Equity ratio 3.07 3.07
Cost of debt 7.00% 8.30%
After-tax WACC 5.9% 7.7%
Selected WACC 6.8%

JEF'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 JEF:

cost_of_equity (10.40%) = 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.