AGS
PlayAGS Inc
Price:  
12.07 
USD
Volume:  
503,870.00
United States | Hotels, Restaurants & Leisure
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AGS WACC - Weighted Average Cost of Capital

The WACC of PlayAGS Inc (AGS) is 6.1%.

The Cost of Equity of PlayAGS Inc (AGS) is 7.10%.
The Cost of Debt of PlayAGS Inc (AGS) is 7.45%.

Range Selected
Cost of equity 5.90% - 8.30% 7.10%
Tax rate 16.40% - 42.80% 29.60%
Cost of debt 7.00% - 7.90% 7.45%
WACC 5.9% - 6.3% 6.1%
WACC

AGS WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.45 0.61
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.90% 8.30%
Tax rate 16.40% 42.80%
Debt/Equity ratio 1.07 1.07
Cost of debt 7.00% 7.90%
After-tax WACC 5.9% 6.3%
Selected WACC 6.1%

AGS'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 AGS:

cost_of_equity (7.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.45) + 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.