SF
Stifel Financial Corp
Price:  
111.17 
USD
Volume:  
887,559.00
United States | Capital Markets
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SF WACC - Weighted Average Cost of Capital

The WACC of Stifel Financial Corp (SF) is 8.0%.

The Cost of Equity of Stifel Financial Corp (SF) is 16.25%.
The Cost of Debt of Stifel Financial Corp (SF) is 6.55%.

Range Selected
Cost of equity 13.00% - 19.50% 16.25%
Tax rate 22.70% - 23.70% 23.20%
Cost of debt 4.00% - 9.10% 6.55%
WACC 5.8% - 10.3% 8.0%
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 1.98 2.61
Additional risk adjustments 0.0% 0.5%
Cost of equity 13.00% 19.50%
Tax rate 22.70% 23.70%
Debt/Equity ratio 2.71 2.71
Cost of debt 4.00% 9.10%
After-tax WACC 5.8% 10.3%
Selected WACC 8.0%

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 (16.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.98) + 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.