SF
Stifel Financial Corp
Price:  
89.41 
USD
Volume:  
617,386.00
United States | Capital Markets
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SF WACC - Weighted Average Cost of Capital

The WACC of Stifel Financial Corp (SF) is 7.8%.

The Cost of Equity of Stifel Financial Corp (SF) is 17.00%.
The Cost of Debt of Stifel Financial Corp (SF) is 6.55%.

Range Selected
Cost of equity 13.40% - 20.60% 17.00%
Tax rate 22.70% - 23.70% 23.20%
Cost of debt 4.00% - 9.10% 6.55%
WACC 5.4% - 10.1% 7.8%
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 2.06 2.8
Additional risk adjustments 0.0% 0.5%
Cost of equity 13.40% 20.60%
Tax rate 22.70% 23.70%
Debt/Equity ratio 3.37 3.37
Cost of debt 4.00% 9.10%
After-tax WACC 5.4% 10.1%
Selected WACC 7.8%

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 (17.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (2.06) + 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.