GH.TO WACC - Weighted Average Cost of Capital
The WACC of Gamehost Inc (GH.TO) is 6.9%.
| Range | Selected | |
| Cost of equity | 6.0% - 9.6% | 7.8% |
| Tax rate | 21.9% - 23.0% | 22.45% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.4% - 8.5% | 6.9% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.55 | 0.9 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.0% | 9.6% |
| Tax rate | 21.9% | 23.0% |
| Debt/Equity ratio | 0.23 | 0.23 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.4% | 8.5% |
| Selected WACC | 6.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GH.TO | Gamehost Inc | 0.23 | 0.22 | 0.19 |
| ARHN | Archon Corp | 0.45 | 0.18 | 0.14 |
| BPF.UN.TO | Boston Pizza Royalties Income Fund | 0.22 | 0.84 | 0.72 |
| CHDN | Churchill Downs Inc | 0.72 | 0.53 | 0.34 |
| CNTY | Century Casinos Inc | 22.38 | 1.21 | 0.07 |
| MGM | MGM Resorts International | 0.72 | 1.46 | 0.94 |
| RRR | Red Rock Resorts Inc | 0.72 | 1.11 | 0.71 |
| TNA.V | Evergreen Gaming Corp | 0.15 | 1.02 | 0.92 |
| WBAI | 500.Com Ltd | 0 | 1.78 | 1.78 |
| Low | High | |
| Unlevered beta | 0.42 | 0.72 |
| Relevered beta | 0.33 | 0.85 |
| Adjusted relevered beta | 0.55 | 0.9 |
GH.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 GH.TO:
cost_of_equity (7.80%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * 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.