LOGN
Logansport Financial Corp
Price:  
30.05 
USD
Volume:  
160.00
United States | Thrifts & Mortgage Finance
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LOGN WACC - Weighted Average Cost of Capital

The WACC of Logansport Financial Corp (LOGN) is 5.6%.

The Cost of Equity of Logansport Financial Corp (LOGN) is 6.50%.
The Cost of Debt of Logansport Financial Corp (LOGN) is 5.00%.

Range Selected
Cost of equity 5.60% - 7.40% 6.50%
Tax rate 17.50% - 18.00% 17.75%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.0% - 6.2% 5.6%
WACC

LOGN WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 4.2% 5.2%
Adjusted beta 0.56 0.62
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.60% 7.40%
Tax rate 17.50% 18.00%
Debt/Equity ratio 0.59 0.59
Cost of debt 5.00% 5.00%
After-tax WACC 5.0% 6.2%
Selected WACC 5.6%

LOGN'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 LOGN:

cost_of_equity (6.50%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.56) + 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.