AESE WACC - Weighted Average Cost of Capital
The WACC of Allied Esports Entertainment Inc (AESE) is 5.2%.
| Range | Selected | |
| Cost of equity | 5.6% - 7.9% | 6.75% |
| Tax rate | 27.0% - 27.0% | 27% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.6% - 5.8% | 5.2% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.33 | 0.52 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.6% | 7.9% |
| Tax rate | 27.0% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.6% | 5.8% |
| Selected WACC | 5.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| AESE | Allied Esports Entertainment Inc | 1.14 | 1.1 | 0.6 |
| BETS.CN | International Game Technologies Inc | 0.2 | 3.55 | 3.09 |
| CLUBQ | Town Sports International Holdings Inc | 63244.87 | 1.57 | 0 |
| HOFV | Hall of Fame Resort & Entertainment Co | 45.37 | 0.76 | 0.02 |
| PRKA | Parks! America Inc | 0.12 | 0.67 | 0.62 |
| PRXIQ | Premier Exhibitions Inc | 11307.69 | -0.95 | 0 |
| SCRH | Scores Holding Company Inc | 4.09 | -115.36 | -28.96 |
| TOUR | Tuniu Corp | 0 | 0.4 | 0.4 |
| WINR | Simplicity Esports and Gaming Co | 1216.98 | -294.74 | -0.33 |
| WPFH | World Poker Fund Holdings Inc | 28339.84 | -0.14 | 0 |
| Low | High | |
| Unlevered beta | 0 | 0.17 |
| Relevered beta | 0 | 0.28 |
| Adjusted relevered beta | 0.33 | 0.52 |
AESE'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 AESE:
cost_of_equity (6.75%) = risk_free_rate (4.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.33) + 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.