ESE.V
ESE Entertainment Inc
Price:  
0.05 
CAD
Volume:  
362,060.00
Canada | N/A
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ESE.V WACC - Weighted Average Cost of Capital

The WACC of ESE Entertainment Inc (ESE.V) is 8.7%.

The Cost of Equity of ESE Entertainment Inc (ESE.V) is 9.05%.
The Cost of Debt of ESE Entertainment Inc (ESE.V) is 7.00%.

Range Selected
Cost of equity 8.00% - 10.10% 9.05%
Tax rate 0.10% - 0.30% 0.20%
Cost of debt 7.00% - 7.00% 7.00%
WACC 7.8% - 9.6% 8.7%
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 0.8 0.86
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.00% 10.10%
Tax rate 0.10% 0.30%
Debt/Equity ratio 0.17 0.17
Cost of debt 7.00% 7.00%
After-tax WACC 7.8% 9.6%
Selected WACC 8.7%

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 (9.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.8) + 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.