SF WACC - Weighted Average Cost of Capital

The WACC of Stifel Financial Corp (SF) is 6.8%.

The Cost of Equity of Stifel Financial Corp (SF) is 13.20%.

The Cost of Debt of Stifel Financial Corp (SF) is 5.50%.

	Range	Selected
Cost of equity	10.20% - 16.20%	13.20%
Tax rate	22.20% - 23.70%	22.95%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.1% - 8.5%	6.8%

WACC

SF WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	1.38	2.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.20%	16.20%

Tax rate	22.20%	23.70%
Debt/Equity ratio	2.51	2.51
Cost of debt	4.00%	7.00%

After-tax WACC	5.1%	8.5%


Selected WACC	6.8%

SF'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 SF:

cost_of_equity (13.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.38) + 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.