GDEN WACC - Weighted Average Cost of Capital
The WACC of Golden Entertainment Inc (GDEN) is 8.9%.
| Range | Selected | |
| Cost of equity | 6.4% - 10.0% | 8.2% |
| Tax rate | 0.5% - 9.5% | 5% |
| Cost of debt | 6.2% - 15.6% | 10.9% |
| WACC | 6.3% - 11.5% | 8.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.55 | 0.92 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.4% | 10.0% |
| Tax rate | 0.5% | 9.5% |
| Debt/Equity ratio | 0.57 | 0.57 |
| Cost of debt | 6.2% | 15.6% |
| After-tax WACC | 6.3% | 11.5% |
| Selected WACC | 8.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GDEN | Golden Entertainment Inc | 0.57 | 0.88 | 0.56 |
| ACEL | Accel Entertainment Inc | 0.61 | 0.91 | 0.57 |
| BALY | Bally's Corp | 6.06 | 0.86 | 0.12 |
| CPHC | Canterbury Park Holding Corp | 0 | 0.18 | 0.18 |
| FLL | Full House Resorts Inc | 4.17 | 1.17 | 0.23 |
| GLXZ | Galaxy Gaming Inc | 0.78 | -0.71 | -0.4 |
| KENS | Kenilworth Systems Corp | 0 | 0.1 | 0.1 |
| RSI | Rush Street Interactive Inc | 0 | 1.08 | 1.08 |
| TNA.V | Evergreen Gaming Corp | 0.15 | 1.02 | 0.89 |
| WBAI | 500.Com Ltd | 0 | 1.78 | 1.78 |
| Low | High | |
| Unlevered beta | 0.21 | 0.57 |
| Relevered beta | 0.33 | 0.88 |
| Adjusted relevered beta | 0.55 | 0.92 |
GDEN'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 GDEN:
cost_of_equity (8.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.55) + 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.