ATLC WACC - Weighted Average Cost of Capital

The WACC of Atlanticus Holdings Corp (ATLC) is 12.5%.

The Cost of Equity of Atlanticus Holdings Corp (ATLC) is 13.05%.

The Cost of Debt of Atlanticus Holdings Corp (ATLC) is 15.55%.

	Range	Selected
Cost of equity	10.40% - 15.70%	13.05%
Tax rate	19.90% - 20.60%	20.25%
Cost of debt	7.20% - 23.90%	15.55%
WACC	6.7% - 18.3%	12.5%

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	1.42	1.94

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.40%	15.70%

Tax rate	19.90%	20.60%
Debt/Equity ratio	4.31	4.31
Cost of debt	7.20%	23.90%

After-tax WACC	6.7%	18.3%


Selected WACC	12.5%

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 (13.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.42) + 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.