PFC
Premier Financial Corp (OHIO)
Price:  
28.04 
USD
Volume:  
3,060,287.00
United States | Thrifts & Mortgage Finance
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PFC WACC - Weighted Average Cost of Capital

The WACC of Premier Financial Corp (OHIO) (PFC) is 6.5%.

The Cost of Equity of Premier Financial Corp (OHIO) (PFC) is 6.75%.
The Cost of Debt of Premier Financial Corp (OHIO) (PFC) is 5.00%.

Range Selected
Cost of equity 5.50% - 8.00% 6.75%
Tax rate 19.90% - 20.30% 20.10%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.4% - 7.7% 6.5%
WACC

PFC WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.36 0.56
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.50% 8.00%
Tax rate 19.90% 20.30%
Debt/Equity ratio 0.09 0.09
Cost of debt 5.00% 5.00%
After-tax WACC 5.4% 7.7%
Selected WACC 6.5%

PFC'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 PFC:

cost_of_equity (6.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.36) + 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.