GLUU WACC - Weighted Average Cost of Capital
The WACC of Glu Mobile Inc (GLUU) is 6.0%.
| Range | Selected | |
| Cost of equity | 4.9% - 9.6% | 7.25% |
| Tax rate | 4.8% - 5.1% | 4.95% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.8% - 7.2% | 6.0% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.4 | 1.04 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.9% | 9.6% |
| Tax rate | 4.8% | 5.1% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.8% | 7.2% |
| Selected WACC | 6.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GLUU | Glu Mobile Inc | 0.98 | 1.05 | 0.54 |
| FNGR | FingerMotion Inc | 0.01 | 1.66 | 1.65 |
| GAME.V | Engine Media Holdings Inc | 1.22 | 0.56 | 0.26 |
| IPUB | indiePub Entertainment Inc | 2571.57 | 0 | 0 |
| KIDZ.V | Kidoz Inc | 1.04 | 1.17 | 0.59 |
| KUU.V | Kuuhubb Inc | 9.01 | 4.33 | 0.45 |
| MSGM | Motorsport Games Inc | 0 | -0.83 | -0.83 |
| NCTY | The9 Ltd | 0.13 | 1.29 | 1.15 |
| NTES | NetEase Inc | 0.02 | 0.41 | 0.4 |
| PLGC | Playlogic Entertainment Inc | 5.55 | 0 | 0 |
| ZNGA | Zynga Inc | 0.14 | 0.02 | 0.02 |
| Low | High | |
| Unlevered beta | 0.26 | 0.45 |
| Relevered beta | 0.1 | 1.06 |
| Adjusted relevered beta | 0.4 | 1.04 |
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.