STBA
S&T Bancorp Inc
Price:  
37.82 
USD
Volume:  
156,840.00
United States | Banks
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STBA WACC - Weighted Average Cost of Capital

The WACC of S&T Bancorp Inc (STBA) is 8.7%.

The Cost of Equity of S&T Bancorp Inc (STBA) is 9.00%.
The Cost of Debt of S&T Bancorp Inc (STBA) is 5.00%.

Range Selected
Cost of equity 7.90% - 10.10% 9.00%
Tax rate 18.90% - 19.30% 19.10%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.6% - 9.7% 8.7%
WACC

STBA WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.87 0.93
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.90% 10.10%
Tax rate 18.90% 19.30%
Debt/Equity ratio 0.07 0.07
Cost of debt 5.00% 5.00%
After-tax WACC 7.6% 9.7%
Selected WACC 8.7%

STBA'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 STBA:

cost_of_equity (9.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.87) + 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.