GH.TO WACC - Weighted Average Cost of Capital

The WACC of Gamehost Inc (GH.TO) is 6.3%.

The Cost of Equity of Gamehost Inc (GH.TO) is 6.90%.

The Cost of Debt of Gamehost Inc (GH.TO) is 4.25%.

	Range	Selected
Cost of equity	5.90% - 7.90%	6.90%
Tax rate	21.90% - 23.00%	22.45%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.4% - 7.2%	6.3%

WACC

GH.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.53	0.62

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.90%	7.90%

Tax rate	21.90%	23.00%
Debt/Equity ratio	0.2	0.2
Cost of debt	4.00%	4.50%

After-tax WACC	5.4%	7.2%


Selected WACC	6.3%

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 (6.90%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.53) + 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.