GLUU
Glu Mobile Inc
Price:  
12.5 
USD
Volume:  
1,448,840
United States | Entertainment

GLUU WACC - Weighted Average Cost of Capital

The WACC of Glu Mobile Inc (GLUU) is 6.0%.

The Cost of Equity of Glu Mobile Inc (GLUU) is 7.25%.
The Cost of Debt of Glu Mobile Inc (GLUU) is 5%.

RangeSelected
Cost of equity4.9% - 9.6%7.25%
Tax rate4.8% - 5.1%4.95%
Cost of debt5.0% - 5.0%5%
WACC4.8% - 7.2%6.0%
WACC

GLUU WACC calculation

CategoryLowHigh
Long-term bond rate3.2%3.7%
Equity market risk premium4.2%5.2%
Adjusted beta0.41.04
Additional risk adjustments0.0%0.5%
Cost of equity4.9%9.6%
Tax rate4.8%5.1%
Debt/Equity ratio
11
Cost of debt5.0%5.0%
After-tax WACC4.8%7.2%
Selected WACC6.0%

GLUU'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 GLUU:

cost_of_equity (7.25%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.4) + 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.