DHCC WACC - Weighted Average Cost of Capital
The WACC of Diamondhead Casino Corp (DHCC) is 4.3%.
| Range | Selected | |
| Cost of equity | 3.1% - 7.6% | 5.35% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 3.4% - 5.2% | 4.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | -0.72 | 0.04 |
| Additional risk adjustments | 2.5% | 3.0% |
| Cost of equity | 3.1% | 7.6% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1.59 | 1.59 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 3.4% | 5.2% |
| Selected WACC | 4.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| DHCC | Diamondhead Casino Corp | 1.59 | -0.71 | -0.33 |
| CBI.V | Colibri Resource Corp | 0.45 | -1.28 | -0.96 |
| CRES.CN | Crest Resources Inc | 0.01 | -1.71 | -1.7 |
| DKMR | Xtreme Fighting Championships Inc | 0.29 | 0.99 | 0.82 |
| ECXJ | Cxj Group Co Ltd | 0.14 | -0.57 | -0.51 |
| ETR.CN | Etruscus Resources Corp | 0 | 1.31 | 1.3 |
| IDVV | International Endeavors Corp | 0.62 | -1.58 | -1.08 |
| RAYN.CN | Raindrop Ventures Inc | 0 | 1.01 | 1.01 |
| VAPR | Vaporbrands International Inc | 0.02 | -1.62 | -1.59 |
| Low | High | |
| Unlevered beta | -0.87 | -0.37 |
| Relevered beta | -1.57 | -0.43 |
| Adjusted relevered beta | -0.72 | 0.04 |
DHCC'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 DHCC:
cost_of_equity (5.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (-0.72) + risk_adjustments (2.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.