MSBI
Midland States Bancorp Inc
Price:  
18.42 
USD
Volume:  
93,064.00
United States | Banks
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MSBI WACC - Weighted Average Cost of Capital

The WACC of Midland States Bancorp Inc (MSBI) is 7.9%.

The Cost of Equity of Midland States Bancorp Inc (MSBI) is 10.15%.
The Cost of Debt of Midland States Bancorp Inc (MSBI) is 5.00%.

Range Selected
Cost of equity 8.80% - 11.50% 10.15%
Tax rate 21.80% - 26.10% 23.95%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.0% - 8.8% 7.9%
WACC

MSBI WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.06 1.19
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.80% 11.50%
Tax rate 21.80% 26.10%
Debt/Equity ratio 0.55 0.55
Cost of debt 5.00% 5.00%
After-tax WACC 7.0% 8.8%
Selected WACC 7.9%

MSBI'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 MSBI:

cost_of_equity (10.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.06) + 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.