OMF
OneMain Holdings Inc
Price:  
49.35 
USD
Volume:  
836,709.00
United States | Consumer Finance
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OMF WACC - Weighted Average Cost of Capital

The WACC of OneMain Holdings Inc (OMF) is 9.6%.

The Cost of Equity of OneMain Holdings Inc (OMF) is 8.80%.
The Cost of Debt of OneMain Holdings Inc (OMF) is 13.05%.

Range Selected
Cost of equity 7.40% - 10.20% 8.80%
Tax rate 24.20% - 24.50% 24.35%
Cost of debt 5.20% - 20.90% 13.05%
WACC 4.7% - 14.6% 9.6%
WACC

OMF WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.78 0.95
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.40% 10.20%
Tax rate 24.20% 24.50%
Debt/Equity ratio 3.65 3.65
Cost of debt 5.20% 20.90%
After-tax WACC 4.7% 14.6%
Selected WACC 9.6%

OMF'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 OMF:

cost_of_equity (8.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.78) + 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.