TSBK
Timberland Bancorp Inc
Price:  
32.39 
USD
Volume:  
15,073
United States | Thrifts & Mortgage Finance

TSBK WACC - Weighted Average Cost of Capital

The WACC of Timberland Bancorp Inc (TSBK) is 6.9%.

The Cost of Equity of Timberland Bancorp Inc (TSBK) is 9.9%.
The Cost of Debt of Timberland Bancorp Inc (TSBK) is 5%.

RangeSelected
Cost of equity8.2% - 11.6%9.9%
Tax rate20.1% - 20.1%20.1%
Cost of debt5.0% - 5.0%5%
WACC6.1% - 7.8%6.9%
WACC

TSBK WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.941.2
Additional risk adjustments0.0%0.5%
Cost of equity8.2%11.6%
Tax rate20.1%20.1%
Debt/Equity ratio
11
Cost of debt5.0%5.0%
After-tax WACC6.1%7.8%
Selected WACC6.9%

TSBK'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 TSBK:

cost_of_equity (9.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.94) + 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.