ESGC WACC - Weighted Average Cost of Capital

The WACC of Eros STX Global Corp (ESGC) is 5.5%.

The Cost of Equity of Eros STX Global Corp (ESGC) is 12.90%.

The Cost of Debt of Eros STX Global Corp (ESGC) is 6.50%.

	Range	Selected
Cost of equity	10.10% - 15.70%	12.90%
Tax rate	31.00% - 48.90%	39.95%
Cost of debt	6.00% - 7.00%	6.50%
WACC	5.2% - 5.8%	5.5%

WACC

ESGC WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	4.2%	5.2%
Adjusted beta	1.63	2.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.10%	15.70%

Tax rate	31.00%	48.90%
Debt/Equity ratio	4.35	4.35
Cost of debt	6.00%	7.00%

After-tax WACC	5.2%	5.8%


Selected WACC	5.5%

ESGC'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 ESGC:

cost_of_equity (12.90%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (1.63) + 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.