FCFS
FirstCash Inc
Price:  
133.93 
USD
Volume:  
201,057.00
United States | Consumer Finance
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

FCFS WACC - Weighted Average Cost of Capital

The WACC of FirstCash Inc (FCFS) is 6.9%.

The Cost of Equity of FirstCash Inc (FCFS) is 7.75%.
The Cost of Debt of FirstCash Inc (FCFS) is 5.20%.

Range Selected
Cost of equity 6.10% - 9.40% 7.75%
Tax rate 24.80% - 25.00% 24.90%
Cost of debt 5.10% - 5.30% 5.20%
WACC 5.6% - 8.1% 6.9%
WACC

FCFS WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.48 0.8
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.10% 9.40%
Tax rate 24.80% 25.00%
Debt/Equity ratio 0.29 0.29
Cost of debt 5.10% 5.30%
After-tax WACC 5.6% 8.1%
Selected WACC 6.9%

FCFS'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 FCFS:

cost_of_equity (7.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.48) + 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.