RIVE
Riverview Financial Corp
Price:  
15.47 
USD
Volume:  
56,140
United States | Banks

RIVE WACC - Weighted Average Cost of Capital

The WACC of Riverview Financial Corp (RIVE) is 5.9%.

The Cost of Equity of Riverview Financial Corp (RIVE) is 8.85%.
The Cost of Debt of Riverview Financial Corp (RIVE) is 5%.

RangeSelected
Cost of equity7.3% - 10.4%8.85%
Tax rate16.4% - 20.3%18.35%
Cost of debt5.0% - 5.0%5%
WACC5.4% - 6.5%5.9%
WACC

RIVE WACC calculation

CategoryLowHigh
Long-term bond rate3.2%3.7%
Equity market risk premium4.2%5.2%
Adjusted beta0.981.19
Additional risk adjustments0.0%0.5%
Cost of equity7.3%10.4%
Tax rate16.4%20.3%
Debt/Equity ratio
1.591.59
Cost of debt5.0%5.0%
After-tax WACC5.4%6.5%
Selected WACC5.9%

RIVE'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 RIVE:

cost_of_equity (8.85%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.98) + 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.