ENVA WACC - Weighted Average Cost of Capital
The WACC of Enova International Inc (ENVA) is 8.6%.
| Range | Selected | |
| Cost of equity | 9.3% - 14.1% | 11.7% |
| Tax rate | 22.9% - 23.3% | 23.1% |
| Cost of debt | 7.5% - 8.2% | 7.85% |
| WACC | 7.3% - 9.8% | 8.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.17 | 1.65 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.3% | 14.1% |
| Tax rate | 22.9% | 23.3% |
| Debt/Equity ratio | 1.21 | 1.21 |
| Cost of debt | 7.5% | 8.2% |
| After-tax WACC | 7.3% | 9.8% |
| Selected WACC | 8.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ENVA | Enova International Inc | 1.21 | 1.4 | 0.72 |
| ELVT | Elevate Credit Inc | 8.59 | 2.09 | 0.27 |
| EZPW | EZCORP Inc | 0.43 | 0.05 | 0.03 |
| GSY.TO | goeasy Ltd | 1.34 | 1.1 | 0.54 |
| HX | Xiaobai Maimai Inc | 0.18 | 1.4 | 1.23 |
| LC | LendingClub Corp | 6.32 | 1.63 | 0.28 |
| LX | Lexinfintech Holdings Ltd | 0.58 | 1.4 | 0.96 |
| MIT.V | Mint Corp | 0.05 | 1.9 | 1.84 |
| QFIN | 360 DigiTech Inc | 0.03 | 1.28 | 1.25 |
| WRLD | World Acceptance Corp | 0.48 | 1.52 | 1.11 |
| Low | High | |
| Unlevered beta | 0.65 | 1.02 |
| Relevered beta | 1.25 | 1.97 |
| Adjusted relevered beta | 1.17 | 1.65 |
ENVA'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 ENVA:
cost_of_equity (11.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.17) + 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.