ESCA
Escalade Inc
Price:  
15.30 
USD
Volume:  
9,844.00
United States | Leisure Products
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ESCA WACC - Weighted Average Cost of Capital

The WACC of Escalade Inc (ESCA) is 8.0%.

The Cost of Equity of Escalade Inc (ESCA) is 8.55%.
The Cost of Debt of Escalade Inc (ESCA) is 5.15%.

Range Selected
Cost of equity 7.40% - 9.70% 8.55%
Tax rate 20.90% - 21.30% 21.10%
Cost of debt 4.90% - 5.40% 5.15%
WACC 7.0% - 9.1% 8.0%
WACC

ESCA WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.76 0.87
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.40% 9.70%
Tax rate 20.90% 21.30%
Debt/Equity ratio 0.12 0.12
Cost of debt 4.90% 5.40%
After-tax WACC 7.0% 9.1%
Selected WACC 8.0%

ESCA'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 ESCA:

cost_of_equity (8.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.76) + 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.