RBB
RBB Bancorp
Price:  
15.82 
USD
Volume:  
21,941.00
United States | Banks
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RBB WACC - Weighted Average Cost of Capital

The WACC of RBB Bancorp (RBB) is 7.9%.

The Cost of Equity of RBB Bancorp (RBB) is 10.05%.
The Cost of Debt of RBB Bancorp (RBB) is 5.00%.

Range Selected
Cost of equity 8.70% - 11.40% 10.05%
Tax rate 29.50% - 29.60% 29.55%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.0% - 8.8% 7.9%
WACC

RBB WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.06 1.16
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.70% 11.40%
Tax rate 29.50% 29.60%
Debt/Equity ratio 0.48 0.48
Cost of debt 5.00% 5.00%
After-tax WACC 7.0% 8.8%
Selected WACC 7.9%

RBB'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 RBB:

cost_of_equity (10.05%) = 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.