GC.TO WACC - Weighted Average Cost of Capital
The WACC of Great Canadian Gaming Corp (GC.TO) is 7.1%.
| Range | Selected | |
| Cost of equity | 7.6% - 10.0% | 8.8% |
| Tax rate | 21.5% - 24.1% | 22.8% |
| Cost of debt | 6.5% - 7.0% | 6.75% |
| WACC | 6.4% - 7.8% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 3.4% | 3.9% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.9 | 0.98 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.6% | 10.0% |
| Tax rate | 21.5% | 24.1% |
| Debt/Equity ratio | 0.88 | 0.88 |
| Cost of debt | 6.5% | 7.0% |
| After-tax WACC | 6.4% | 7.8% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GC.TO | Great Canadian Gaming Corp | 0.88 | 2.13 | 1.26 |
| ACEL | Accel Entertainment Inc | 0.61 | 0.91 | 0.62 |
| BALY | Bally's Corp | 6.06 | 0.86 | 0.15 |
| CPHC | Canterbury Park Holding Corp | 0 | 0.18 | 0.18 |
| FLL | Full House Resorts Inc | 4.17 | 1.17 | 0.27 |
| PBL.TO | Pollard Banknote Ltd | 0.31 | 0.77 | 0.62 |
| TNA.V | Evergreen Gaming Corp | 0.15 | 1.02 | 0.92 |
| LO24.DE | Lotto24 AG | 0.01 | 0.37 | 0.37 |
| PARP.PA | Groupe Partouche SA | 1.63 | 0.35 | 0.15 |
| TIMA.DE | ZEAL Network SE | 0.1 | 0.38 | 0.36 |
| Low | High | |
| Unlevered beta | 0.32 | 0.47 |
| Relevered beta | 0.85 | 0.97 |
| Adjusted relevered beta | 0.9 | 0.98 |
GC.TO'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 GC.TO:
cost_of_equity (8.80%) = risk_free_rate (3.65%) + equity_risk_premium (5.20%) * adjusted_beta (0.9) + 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.