GC.TO WACC - Weighted Average Cost of Capital

The WACC of Great Canadian Gaming Corp (GC.TO) is 7.1%.

The Cost of Equity of Great Canadian Gaming Corp (GC.TO) is 8.80%.

The Cost of Debt of Great Canadian Gaming Corp (GC.TO) is 6.75%.

	Range	Selected
Cost of equity	7.60% - 10.00%	8.80%
Tax rate	21.50% - 24.10%	22.80%
Cost of debt	6.50% - 7.00%	6.75%
WACC	6.4% - 7.8%	7.1%

WACC

GC.TO WACC calculation

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	7.60%	10.00%

Tax rate	21.50%	24.10%
Debt/Equity ratio	0.88	0.88
Cost of debt	6.50%	7.00%

After-tax WACC	6.4%	7.8%


Selected WACC	7.1%

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.