IPF.L WACC - Weighted Average Cost of Capital
The WACC of International Personal Finance PLC (IPF.L) is 8.8%.
| Range | Selected | |
| Cost of equity | 7.1% - 10.4% | 8.75% |
| Tax rate | 33.5% - 40.0% | 36.75% |
| Cost of debt | 12.5% - 15.8% | 14.15% |
| WACC | 7.9% - 9.8% | 8.8% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.52 | 0.78 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.1% | 10.4% |
| Tax rate | 33.5% | 40.0% |
| Debt/Equity ratio | 1.57 | 1.57 |
| Cost of debt | 12.5% | 15.8% |
| After-tax WACC | 7.9% | 9.8% |
| Selected WACC | 8.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| IPF.L | International Personal Finance PLC | 1.57 | 0.91 | 0.46 |
| B2H.OL | B2holding ASA | 4.17 | 0.4 | 0.11 |
| DDM.ST | DDM Holding AG | 7.25 | 0.06 | 0.01 |
| FRU.DE | Ferratum Oyj | 4.48 | 1.27 | 0.34 |
| HAT.L | H & T Group PLC | 0.32 | 0.66 | 0.55 |
| HOFI.ST | Hoist Finance AB (publ) | 5.66 | 0.74 | 0.16 |
| MCL.L | Morses Club PLC | 48.49 | 2.08 | 0.07 |
| MOL.MI | Gruppo MutuiOnline SpA | 0.17 | 0.7 | 0.64 |
| PFG.L | Provident Financial PLC | 5.22 | 1.43 | 0.34 |
| RESURS.ST | Resurs Holding AB (publ) | 8.91 | 0.04 | 0.01 |
| Low | High | |
| Unlevered beta | 0.14 | 0.34 |
| Relevered beta | 0.28 | 0.67 |
| Adjusted relevered beta | 0.52 | 0.78 |
IPF.L'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 IPF.L:
cost_of_equity (8.75%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.52) + 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.