ESE.V WACC - Weighted Average Cost of Capital

The WACC of ESE Entertainment Inc (ESE.V) is 8.8%.

The Cost of Equity of ESE Entertainment Inc (ESE.V) is 9.20%.

The Cost of Debt of ESE Entertainment Inc (ESE.V) is 7.00%.

	Range	Selected
Cost of equity	8.10% - 10.30%	9.20%
Tax rate	0.10% - 0.30%	0.20%
Cost of debt	7.00% - 7.00%	7.00%
WACC	7.9% - 9.7%	8.8%

WACC

ESE.V WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.84	0.9

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.10%	10.30%

Tax rate	0.10%	0.30%
Debt/Equity ratio	0.22	0.22
Cost of debt	7.00%	7.00%

After-tax WACC	7.9%	9.7%


Selected WACC	8.8%

ESE.V'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 ESE.V:

cost_of_equity (9.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.84) + 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.