OPRT WACC - Weighted Average Cost of Capital

The WACC of Oportun Financial Corp (OPRT) is 12.2%.

The Cost of Equity of Oportun Financial Corp (OPRT) is 28.90%.

The Cost of Debt of Oportun Financial Corp (OPRT) is 14.55%.

	Range	Selected
Cost of equity	23.40% - 34.40%	28.90%
Tax rate	24.80% - 26.60%	25.70%
Cost of debt	5.20% - 23.90%	14.55%
WACC	5.5% - 18.8%	12.2%

WACC

OPRT WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	4.26	5.28

Additional risk adjustments	0.0%	0.5%
Cost of equity	23.40%	34.40%

Tax rate	24.80%	26.60%
Debt/Equity ratio	11.72	11.72
Cost of debt	5.20%	23.90%

After-tax WACC	5.5%	18.8%


Selected WACC	12.2%

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 (28.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (4.26) + 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.