CZR
Caesars Entertainment Inc
Price:  
27.80 
USD
Volume:  
4,963,429.00
United States | Hotels, Restaurants & Leisure
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CZR WACC - Weighted Average Cost of Capital

The WACC of Caesars Entertainment Inc (CZR) is 7.2%.

The Cost of Equity of Caesars Entertainment Inc (CZR) is 16.30%.
The Cost of Debt of Caesars Entertainment Inc (CZR) is 7.20%.

Range Selected
Cost of equity 13.20% - 19.40% 16.30%
Tax rate 16.70% - 41.40% 29.05%
Cost of debt 6.90% - 7.50% 7.20%
WACC 7.1% - 7.2% 7.2%
WACC

CZR WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 2.02 2.6
Additional risk adjustments 0.0% 0.5%
Cost of equity 13.20% 19.40%
Tax rate 16.70% 41.40%
Debt/Equity ratio 4.33 4.33
Cost of debt 6.90% 7.50%
After-tax WACC 7.1% 7.2%
Selected WACC 7.2%

CZR'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 CZR:

cost_of_equity (16.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (2.02) + 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.