OPY
Oppenheimer Holdings Inc
Price:  
65.29 
USD
Volume:  
41,650
United States | Capital Markets

OPY WACC - Weighted Average Cost of Capital

The WACC of Oppenheimer Holdings Inc (OPY) is 7.6%.

The Cost of Equity of Oppenheimer Holdings Inc (OPY) is 10.8%.
The Cost of Debt of Oppenheimer Holdings Inc (OPY) is 8.55%.

RangeSelected
Cost of equity8.7% - 12.9%10.8%
Tax rate29.4% - 30.8%30.1%
Cost of debt7.5% - 9.6%8.55%
WACC6.5% - 8.8%7.6%
WACC

OPY WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta1.061.43
Additional risk adjustments0.0%0.5%
Cost of equity8.7%12.9%
Tax rate29.4%30.8%
Debt/Equity ratio
1.91.9
Cost of debt7.5%9.6%
After-tax WACC6.5%8.8%
Selected WACC7.6%

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.