The WACC of Triumph Financial Inc (TFIN) is 8.9%.
Range | Selected | |
Cost of equity | 8.3% - 10.4% | 9.35% |
Tax rate | 22.4% - 23.4% | 22.9% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 8.0% - 9.9% | 8.9% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.96 | 0.98 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.3% | 10.4% |
Tax rate | 22.4% | 23.4% |
Debt/Equity ratio | 0.07 | 0.07 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 8.0% | 9.9% |
Selected WACC | 8.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
TFIN | Triumph Financial Inc | 0.07 | 1.33 | 1.26 |
GWB | Great Western Bancorp Inc | 0.12 | 1.1 | 1.01 |
HOPE | Hope Bancorp Inc | 0.07 | 0.99 | 0.94 |
NBHC | National Bank Holdings Corp | 0.05 | 0.95 | 0.91 |
NBTB | NBT Bancorp Inc | 0.18 | 0.98 | 0.86 |
PNC | PNC Financial Services Group Inc | 0.51 | 1.04 | 0.75 |
SASR | Sandy Spring Bancorp Inc | 0.35 | 1.18 | 0.93 |
STEL | Stellar Bancorp Inc | 0.05 | 0.89 | 0.86 |
TCBK | Trico Bancshares | 0.14 | 1 | 0.9 |
WABC | Westamerica Bancorp | 0.09 | 0.88 | 0.82 |
Low | High | |
Unlevered beta | 0.89 | 0.92 |
Relevered beta | 0.94 | 0.97 |
Adjusted relevered beta | 0.96 | 0.98 |
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 TFIN:
cost_of_equity (9.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.96) + 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.