ATLC WACC - Weighted Average Cost of Capital

The WACC of Atlanticus Holdings Corp (ATLC) is 10.4%.

The Cost of Equity of Atlanticus Holdings Corp (ATLC) is 15.20%.

The Cost of Debt of Atlanticus Holdings Corp (ATLC) is 10.70%.

	Range	Selected
Cost of equity	12.20% - 18.20%	15.20%
Tax rate	18.60% - 19.60%	19.10%
Cost of debt	5.80% - 15.60%	10.70%
WACC	6.8% - 14.1%	10.4%

WACC

ATLC WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	1.82	2.38

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.20%	18.20%

Tax rate	18.60%	19.60%
Debt/Equity ratio	2.68	2.68
Cost of debt	5.80%	15.60%

After-tax WACC	6.8%	14.1%


Selected WACC	10.4%

ATLC'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 ATLC:

cost_of_equity (15.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.82) + 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.