The WACC of Siebert Financial Corp (SIEB) is 6.1%.
Range | Selected | |
Cost of equity | 7.7% - 11.6% | 9.65% |
Tax rate | 24.8% - 27.4% | 26.1% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 5.2% - 7.1% | 6.1% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.83 | 1.2 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.7% | 11.6% |
Tax rate | 24.8% | 27.4% |
Debt/Equity ratio | 1.16 | 1.16 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 5.2% | 7.1% |
Selected WACC | 6.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
SIEB | Siebert Financial Corp | 1.16 | 0.98 | 0.53 |
FRHC | Freedom Holding Corp | 0.32 | 1.07 | 0.86 |
FUTU | Futu Holdings Ltd | 0.23 | 1.44 | 1.23 |
HKIB | Amtd International Inc | 0.04 | 0.91 | 0.88 |
JMP | JMP Group LLC | 0.62 | 0.94 | 0.65 |
LGHL | Lion Group Holding Ltd | 1.16 | -0.27 | -0.15 |
MNC.V | Magnetic North Acquisition Corp | 2.3 | 2.1 | 0.77 |
RCG.TO | RF Capital Group Inc | 1.28 | 0.19 | 0.1 |
SRL | Scully Royalty Ltd | 0.29 | 0.27 | 0.22 |
Low | High | |
Unlevered beta | 0.55 | 0.75 |
Relevered beta | 0.75 | 1.3 |
Adjusted relevered beta | 0.83 | 1.2 |
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 SIEB:
cost_of_equity (9.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.83) + 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.