IPF.L WACC - Weighted Average Cost of Capital

The WACC of International Personal Finance PLC (IPF.L) is 8.8%.

The Cost of Equity of International Personal Finance PLC (IPF.L) is 8.60%.

The Cost of Debt of International Personal Finance PLC (IPF.L) is 14.15%.

	Range	Selected
Cost of equity	6.90% - 10.30%	8.60%
Tax rate	33.50% - 40.00%	36.75%
Cost of debt	12.50% - 15.80%	14.15%
WACC	7.8% - 9.8%	8.8%

WACC

IPF.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.49	0.77

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	10.30%

Tax rate	33.50%	40.00%
Debt/Equity ratio	1.5	1.5
Cost of debt	12.50%	15.80%

After-tax WACC	7.8%	9.8%


Selected WACC	8.8%

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 (8.60%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.49) + 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.