OPRT WACC - Weighted Average Cost of Capital
The WACC of Oportun Financial Corp (OPRT) is 6.2%.
| Range | Selected | |
| Cost of equity | 21.4% - 32.6% | 27% |
| Tax rate | 24.8% - 26.6% | 25.7% |
| Cost of debt | 5.2% - 7.0% | 6.1% |
| WACC | 5.2% - 7.2% | 6.2% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 3.81 | 4.95 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 21.4% | 32.6% |
| Tax rate | 24.8% | 26.6% |
| Debt/Equity ratio | 12.62 | 12.62 |
| Cost of debt | 5.2% | 7.0% |
| After-tax WACC | 5.2% | 7.2% |
| Selected WACC | 6.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| OPRT | Oportun Financial Corp | 12.62 | 1.3 | 0.12 |
| ALLY | Ally Financial Inc | 1.7 | 1.03 | 0.45 |
| AXP | American Express Co | 0.95 | 1.25 | 0.73 |
| COF | Capital One Financial Corp | 0.38 | 1.39 | 1.08 |
| DFS | Discover Financial Services | 0.31 | 1.46 | 1.18 |
| OMF | OneMain Holdings Inc | 3.59 | 1.47 | 0.4 |
| SC | Santander Consumer USA Holdings Inc | 3.23 | 0.96 | 0.28 |
| SLM | SLM Corp | 0.91 | 1.03 | 0.61 |
| SYF | Synchrony Financial | 0.72 | 1.52 | 0.99 |
| TREE | LendingTree Inc | 0.99 | 0.91 | 0.53 |
| Low | High | |
| Unlevered beta | 0.5 | 0.66 |
| Relevered beta | 5.19 | 6.9 |
| Adjusted relevered beta | 3.81 | 4.95 |
OPRT'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 OPRT:
cost_of_equity (27.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (3.81) + 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.