RJF
Raymond James Financial Inc
Price:  
158.40 
USD
Volume:  
1,050,932.00
United States | Capital Markets
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RJF WACC - Weighted Average Cost of Capital

The WACC of Raymond James Financial Inc (RJF) is 7.3%.

The Cost of Equity of Raymond James Financial Inc (RJF) is 9.05%.
The Cost of Debt of Raymond James Financial Inc (RJF) is 8.20%.

Range Selected
Cost of equity 6.90% - 11.20% 9.05%
Tax rate 22.00% - 22.80% 22.40%
Cost of debt 4.00% - 12.40% 8.20%
WACC 4.4% - 10.1% 7.3%
WACC

RJF WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.66 1.13
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.90% 11.20%
Tax rate 22.00% 22.80%
Debt/Equity ratio 1.88 1.88
Cost of debt 4.00% 12.40%
After-tax WACC 4.4% 10.1%
Selected WACC 7.3%

RJF'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 RJF:

cost_of_equity (9.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.66) + 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.