PCSB
PCSB Financial Corp
Price:  
19.04 
USD
Volume:  
124,818.00
United States | Thrifts & Mortgage Finance
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PCSB WACC - Weighted Average Cost of Capital

The WACC of PCSB Financial Corp (PCSB) is 8.3%.

The Cost of Equity of PCSB Financial Corp (PCSB) is 8.45%.
The Cost of Debt of PCSB Financial Corp (PCSB) is 5.00%.

Range Selected
Cost of equity 7.00% - 9.90% 8.45%
Tax rate 21.80% - 23.20% 22.50%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.9% - 9.6% 8.3%
WACC

PCSB WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.68 0.89
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.00% 9.90%
Tax rate 21.80% 23.20%
Debt/Equity ratio 0.04 0.04
Cost of debt 5.00% 5.00%
After-tax WACC 6.9% 9.6%
Selected WACC 8.3%

PCSB'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 PCSB:

cost_of_equity (8.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.68) + 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.