DVD WACC - Weighted Average Cost of Capital
The WACC of Dover Motorsports Inc (DVD) is 6.8%.
| Range | Selected | |
| Cost of equity | 7.9% - 12.0% | 9.95% |
| Tax rate | 24.5% - 30.8% | 27.65% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.8% - 7.7% | 6.8% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 1.12 | 1.49 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.9% | 12.0% |
| Tax rate | 24.5% | 30.8% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.8% | 7.7% |
| Selected WACC | 6.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| DVD | Dover Motorsports Inc | 0.95 | 0.64 | 0.37 |
| AAP.H.V | Alpha Peak Leisure Inc | 0.02 | 0.96 | 0.94 |
| GLXZ | Galaxy Gaming Inc | 0.78 | -0.71 | -0.45 |
| ICE.TO | Canlan Ice Sports Corp | 0.91 | -0.01 | -0.01 |
| PRKA | Parks! America Inc | 0.12 | 0.67 | 0.61 |
| PRXIQ | Premier Exhibitions Inc | 11307.69 | -0.95 | 0 |
| RICK | RCI Hospitality Holdings Inc | 0.64 | 0.92 | 0.62 |
| TNA.V | Evergreen Gaming Corp | 0.15 | 1.02 | 0.92 |
| TWC.TO | TWC Enterprises Ltd | 0.07 | 0.22 | 0.21 |
| WINR | Simplicity Esports and Gaming Co | 1216.98 | -313.97 | -0.34 |
| Low | High | |
| Unlevered beta | 0.12 | 0.47 |
| Relevered beta | 1.18 | 1.73 |
| Adjusted relevered beta | 1.12 | 1.49 |
DVD'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 DVD:
cost_of_equity (9.95%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (1.12) + 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.