RILY
B. Riley Financial Inc
Price:  
3.05 
USD
Volume:  
486,251.00
United States | Capital Markets
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RILY WACC - Weighted Average Cost of Capital

The WACC of B. Riley Financial Inc (RILY) is 6.8%.

The Cost of Equity of B. Riley Financial Inc (RILY) is 117.95%.
The Cost of Debt of B. Riley Financial Inc (RILY) is 6.65%.

Range Selected
Cost of equity 87.20% - 148.70% 117.95%
Tax rate 26.90% - 27.80% 27.35%
Cost of debt 6.30% - 7.00% 6.65%
WACC 6.0% - 7.6% 6.8%
WACC

RILY WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 18.12 25.68
Additional risk adjustments 0.0% 0.5%
Cost of equity 87.20% 148.70%
Tax rate 26.90% 27.80%
Debt/Equity ratio 56.16 56.16
Cost of debt 6.30% 7.00%
After-tax WACC 6.0% 7.6%
Selected WACC 6.8%

RILY'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 RILY:

cost_of_equity (117.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (18.12) + 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.