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Oconee Federal Financial (Oconee Federal Financial) WACC % :6.05% (As of May. 12, 2024)


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What is Oconee Federal Financial WACC %?

As of today (2024-05-12), Oconee Federal Financial's weighted average cost of capital is 6.05%%. Oconee Federal Financial's ROIC % is 0.00% (calculated using TTM income statement data). Oconee Federal Financial earns returns that do not match up to its cost of capital. It will destroy value as it grows.

For a comprehensive WACC calculation, please access the WACC Calculator.


Oconee Federal Financial WACC % Historical Data

The historical data trend for Oconee Federal Financial's WACC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Oconee Federal Financial WACC % Chart

Oconee Federal Financial Annual Data
Trend Jun13 Jun14 Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21 Jun22
WACC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 1.33 5.98 6.89 7.04 7.15

Oconee Federal Financial Quarterly Data
Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Sep23
WACC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 7.15 6.72 2.59 2.53 6.67

Competitive Comparison of Oconee Federal Financial's WACC %

For the Banks - Regional subindustry, Oconee Federal Financial's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Oconee Federal Financial's WACC % Distribution in the Banks Industry

For the Banks industry and Financial Services sector, Oconee Federal Financial's WACC % distribution charts can be found below:

* The bar in red indicates where Oconee Federal Financial's WACC % falls into.



Oconee Federal Financial WACC % Calculation

The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.

WACC=E/(E + D)*Cost of Equity+D/(E + D)*Cost of Debt*(1 - Tax Rate)

1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Oconee Federal Financial's market capitalization (E) is $74.848 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Sep. 2023, Oconee Federal Financial's latest one-year quarterly average Book Value of Debt (D) is $37.05 Mil.
a) weight of equity = E / (E + D) = 74.848 / (74.848 + 37.05) = 0.6689
b) weight of debt = D / (E + D) = 37.05 / (74.848 + 37.05) = 0.3311

2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.49%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Oconee Federal Financial's beta is -0.38.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.49% + -0.38 * 6% = 2.21%

3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Sep. 2023, Oconee Federal Financial's interest expense (positive number) was $6.32 Mil. Its total Book Value of Debt (D) is $37.05 Mil.
Cost of Debt = 6.32 / 37.05 = 17.058%.

4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 0.636 / 3.3507 = 18.98%.

Oconee Federal Financial's Weighted Average Cost Of Capital (WACC) for Today is calculated as:

WACC=E / (E + D)*Cost of Equity+D / (E + D)*Cost of Debt*(1 - Tax Rate)
=0.6689*2.21%+0.3311*17.058%*(1 - 18.98%)
=6.05%

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Oconee Federal Financial  (OTCPK:OFED) WACC % Explanation

Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Oconee Federal Financial's weighted average cost of capital is 6.05%%. Oconee Federal Financial's ROIC % is 0.00% (calculated using TTM income statement data). Oconee Federal Financial earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Be Aware

1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.

2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.

3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.

4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.


Related Terms

Oconee Federal Financial (Oconee Federal Financial) Business Description

Traded in Other Exchanges
N/A
Address
201 East North Second Street, Seneca, SC, USA, 29678
Oconee Federal Financial Corp is a United States-based stock holding company. The company through its subsidiaries provides banking products and services in the us states of South Carolina and Georgia. Its principal business activity involves attracting retail deposits from the public and investing those deposits, together with funds generated from operations, in one-to-four family residential mortgage loans and, to a lesser extent, non-residential mortgage, construction and land, agricultural, and other loans.
Executives
Curtis T Evatt director, officer: EVP and CFO C/O OCONEE FEDERAL SAVINGS AND LOAN, 201 E NORTH SECOND STREET, SENECA SC 29678
Charles Todd Latiff officer: Senior Vice President 201 EAST NORTH SECOND STREET, SENECA SC 29678
David H Stafford officer: SVP and COO 201 E. NORTH SECOND STREET, SENECA SC 29678
John William Hobbs officer: SVP and CFO 6650 CALHOUN MEMORIAL HWY, EASLEY SC 29640
H Allen Salter officer: SVP and CFO C/O OCONEE FEDERAL FINANCIAL CORP., 201 EAST NORTH SECOND STREET, SENECA SC 29678
Sandifer Cecil T Jr. director C/O OCONEE FEDERAL SAVINGS AND LOAN, 201 E NORTH SECOND STREET, SENECA SC 29678
T. Rhett Evatt director, officer: President and CEO C/O OCONEE FEDERAL SAVINGS AND LOAN, 201 E NORTH SECOND STREET, SENECA SC 29678
Mays Harry B Jr. director C/O OCONEE FEDERAL SAVINGS AND LOAN, 201 E NORTH SECOND STREET, SENECA SC 29678
Mclellan Robert N Jr. director C/O OCONEE FEDERAL SAVINGS AND LOAN, 201 E NORTH SECOND STREET, SENECA SC 29678
W. Maurice Poore director C/O OCONEE FEDERAL SAVINGS AND LOAN, 201 E NORTH SECOND STREET, SENECA SC 29678
Nancy M Carter officer: Senior VP and Asst. Treasurer C/O OCONEE FEDERAL SAVINGS AND LOAN, 201 E NORTH SECOND STREET, SENECA SC 29678

Oconee Federal Financial (Oconee Federal Financial) Headlines

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