OPY WACC - Weighted Average Cost of Capital
The WACC of Oppenheimer Holdings Inc (OPY) is 7.6%.
| Range | Selected | |
| Cost of equity | 8.7% - 12.9% | 10.8% |
| Tax rate | 29.4% - 30.8% | 30.1% |
| Cost of debt | 7.5% - 9.6% | 8.55% |
| WACC | 6.5% - 8.8% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.06 | 1.43 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.7% | 12.9% |
| Tax rate | 29.4% | 30.8% |
| Debt/Equity ratio | 1.9 | 1.9 |
| Cost of debt | 7.5% | 9.6% |
| After-tax WACC | 6.5% | 8.8% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| OPY | Oppenheimer Holdings Inc | 1.9 | 0.89 | 0.38 |
| BGCP | BGC Partners Inc | 0.62 | 1.52 | 1.05 |
| CF.TO | Canaccord Genuity Group Inc | 1.12 | 1.37 | 0.76 |
| COWN | Cowen Inc | 3.18 | 1.44 | 0.44 |
| GHL | Greenhill & Co Inc | 0.96 | 0.8 | 0.48 |
| HLI | Houlihan Lokey Inc | 0 | 0.91 | 0.91 |
| JMP | JMP Group LLC | 0.62 | 0.94 | 0.66 |
| PIPR | Piper Sandler Companies | 0.02 | 1.39 | 1.37 |
| RILY | B. Riley Financial Inc | 58.16 | -0.06 | 0 |
| SRL | Scully Royalty Ltd | 0.33 | 0.22 | 0.18 |
| Low | High | |
| Unlevered beta | 0.46 | 0.7 |
| Relevered beta | 1.09 | 1.64 |
| Adjusted relevered beta | 1.06 | 1.43 |
OPY'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 OPY:
cost_of_equity (10.80%) = 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.