SBSI
Southside Bancshares Inc
Price:  
28.88 
USD
Volume:  
92,820.00
United States | Banks
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SBSI WACC - Weighted Average Cost of Capital

The WACC of Southside Bancshares Inc (SBSI) is 8.1%.

The Cost of Equity of Southside Bancshares Inc (SBSI) is 9.10%.
The Cost of Debt of Southside Bancshares Inc (SBSI) is 5.00%.

Range Selected
Cost of equity 7.90% - 10.30% 9.10%
Tax rate 12.90% - 13.70% 13.30%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.2% - 9.1% 8.1%
WACC

SBSI WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.89 0.98
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.90% 10.30%
Tax rate 12.90% 13.70%
Debt/Equity ratio 0.26 0.26
Cost of debt 5.00% 5.00%
After-tax WACC 7.2% 9.1%
Selected WACC 8.1%

SBSI'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 SBSI:

cost_of_equity (9.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.89) + 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.