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Encore Capital Group, Inc. (ECPG) — WACC Analysis

WACC Breakdown

Encore Capital Group, Inc. (ECPG) has a weighted average cost of capital (WACC) of 6.7%. The cost of equity is 8.4%, derived from a beta of 0.83 and a risk-free rate of 4.7%. The after-tax cost of debt is 5.8%. The capital structure is 33.3% equity and 66.7% debt.

Interpretation

A WACC of 6.7% suggests that the market views Encore Capital Group, Inc. as relatively low-risk, with a lower cost of financing.

Investors can compare ECPG's WACC of 6.7% against industry peers to gauge its relative financing costs. A beta of 0.83 reflects the stock's volatility relative to the broader market.

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VALUATION

ECPG WACC: 6.68% for Encore Capital Group, Inc.

Current inputs imply a 8.43% cost of equity and a 7.35% pre-tax cost of debt. Use this discount rate as a starting point for DCF validation.

[01]Current Market Data
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WACC Calculation Process
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Market Data Loaded
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Company Data Fetched
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Beta Calculated (5Y)
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Inputs Auto-Populated
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WACC Calculated
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Step 2: Enter Ticker Symbol
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Step 4: Review Auto-Populated WACC Inputs

Values are automatically populated from real data. You can adjust them manually if needed.

4.30%
1.000
4.23%
5.00%
21.00%
70.00%
Debt: 30.00%Equity: 70.00%

Please enter a valid company ticker to calculate WACC

Encore Capital Group, Inc. Common Stock (ECPG) WACC Results
Weighted Average Cost of Capital
6.68%
Cost of Equity
8.43%
Risk-Free Rate4.68%
Beta0.83
Market Risk Premium4.23%
Cost of Debt
5.81%
Pre-Tax Cost of Debt7.35%
Tax Rate21.00%
Tax Shield1.54%
Capital Structure
Equity: 33.34%($2017.11M)
Debt: 66.66%($4033.30M)
Equity Component
2.81%
33.34% × 8.43%
Debt Component
3.87%
66.66% × 5.81%

Encore Capital Group, Inc. (ECPG) WACC in context

Encore Capital Group, Inc. (ECPG) currently screens with an estimated WACC of 6.68%. That blends a 8.43% cost of equity, a 7.35% pre-tax cost of debt, and a 33.34% equity weight into the discount rate you would typically use in a DCF model.

screens as a relatively low discount rate, which usually supports higher DCF values.

What ECPG WACC implies

A 6.68% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates ECPG

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.83 and equity accounts for 33.34% of capital.

What to do next

Validate business quality on the company page, then carry the same discount-rate assumptions into the DCF page to test fair value sensitivity.

Disclaimer: This is not financial advice. Data sourced from SEC EDGAR and Polygon.io. Past performance does not guarantee future results. Always conduct your own research before making investment decisions.