The WACC of Bally's Corp (BALY) is 13.6%.
| Range | Selected | |
| Cost of equity | 7.30% - 10.70% | 9.00% |
| Tax rate | 3.30% - 4.80% | 4.05% |
| Cost of debt | 6.90% - 23.90% | 15.40% |
| WACC | 6.8% - 20.3% | 13.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.75 | 1.04 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.30% | 10.70% |
| Tax rate | 3.30% | 4.80% |
| Debt/Equity ratio | 4.06 | 4.06 |
| Cost of debt | 6.90% | 23.90% |
| After-tax WACC | 6.8% | 20.3% |
| Selected WACC | 13.6% | |
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 BALY:
cost_of_equity (9.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.75) + 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.