SEZL
Sezzle Inc
Price:  
55.73 
USD
Volume:  
641,379.00
United States | Financial Services
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SEZL WACC - Weighted Average Cost of Capital

The WACC of Sezzle Inc (SEZL) is 8.5%.

The Cost of Equity of Sezzle Inc (SEZL) is 8.45%.
The Cost of Debt of Sezzle Inc (SEZL) is 10.30%.

Range Selected
Cost of equity 7.50% - 9.40% 8.45%
Tax rate 0.10% - 3.30% 1.70%
Cost of debt 5.10% - 15.50% 10.30%
WACC 7.3% - 9.7% 8.5%
WACC

SEZL 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 0.81
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.50% 9.40%
Tax rate 0.10% 3.30%
Debt/Equity ratio 0.06 0.06
Cost of debt 5.10% 15.50%
After-tax WACC 7.3% 9.7%
Selected WACC 8.5%

SEZL'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 SEZL:

cost_of_equity (8.45%) = 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.