QCCO WACC - Weighted Average Cost of Capital
The WACC of QC Holdings Inc (QCCO) is 7.3%.
| Range | Selected | |
| Cost of equity | 6.8% - 10.3% | 8.55% |
| Tax rate | 28.1% - 37.1% | 32.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.0% - 8.6% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.64 | 0.97 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.8% | 10.3% |
| Tax rate | 28.1% | 37.1% |
| Debt/Equity ratio | 0.31 | 0.31 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.0% | 8.6% |
| Selected WACC | 7.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| QCCO | QC Holdings Inc | 0.31 | 8.11 | 6.77 |
| HX | Xiaobai Maimai Inc | 0.18 | 1.4 | 1.26 |
| LX | Lexinfintech Holdings Ltd | 0.56 | 1.42 | 1.05 |
| MFIN | Medallion Financial Corp | 1.32 | 0.44 | 0.24 |
| MIT.V | Mint Corp | 0.05 | 1.9 | 1.85 |
| NICK | Nicholas Financial Inc | 0.64 | 0.61 | 0.43 |
| QFIN | 360 DigiTech Inc | 0.03 | 1.33 | 1.3 |
| RFC.V | Rifco Inc | 6.08 | 1.21 | 0.25 |
| WEI | Weidai Ltd | 0.01 | 0.63 | 0.63 |
| XYF | X Financial | 0.51 | 0.41 | 0.31 |
| YUANF | Fincera Inc | 9.59 | 0 | 0 |
| Low | High | |
| Unlevered beta | 0.43 | 1.05 |
| Relevered beta | 0.46 | 0.96 |
| Adjusted relevered beta | 0.64 | 0.97 |
QCCO'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 QCCO:
cost_of_equity (8.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.64) + 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.