PBHC
Pathfinder Bancorp Inc (MARYLAND)
Price:  
15.25 
USD
Volume:  
1,950
United States | Banks

PBHC WACC - Weighted Average Cost of Capital

The WACC of Pathfinder Bancorp Inc (MARYLAND) (PBHC) is 6.6%.

The Cost of Equity of Pathfinder Bancorp Inc (MARYLAND) (PBHC) is 7.9%.
The Cost of Debt of Pathfinder Bancorp Inc (MARYLAND) (PBHC) is 5%.

RangeSelected
Cost of equity6.4% - 9.4%7.9%
Tax rate16.4% - 18.2%17.3%
Cost of debt5.0% - 5.0%5%
WACC5.6% - 7.6%6.6%
WACC

PBHC WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.540.8
Additional risk adjustments0.0%0.5%
Cost of equity6.4%9.4%
Tax rate16.4%18.2%
Debt/Equity ratio
0.510.51
Cost of debt5.0%5.0%
After-tax WACC5.6%7.6%
Selected WACC6.6%

PBHC'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 PBHC:

cost_of_equity (7.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.54) + 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.