GNUS WACC - Weighted Average Cost of Capital
The WACC of Genius Brands International Inc (GNUS) is 5.4%.
| Range | Selected | |
| Cost of equity | 5.8% - 7.2% | 6.5% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 4.5% - 6.2% | 5.4% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 5.0% | 6.0% |
| Adjusted beta | 0.33 | 0.33 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.8% | 7.2% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.8 | 0.8 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 4.5% | 6.2% |
| Selected WACC | 5.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GNUS | Genius Brands International Inc | 0.8 | 1.81 | 1.14 |
| BBIG | Vinco Ventures Inc | 37741.03 | -9.95 | 0 |
| BWMG | Brownie's Marine Group Inc | 1.74 | -111.62 | -49.16 |
| DGIF | Digital Info Security Co | 454418.6 | 0 | 0 |
| ESCA | Escalade Inc | 0.13 | 0.57 | 0.52 |
| KARE | Tech World Capital Inc | 7.22 | -310.51 | -49.53 |
| LEAT | Leatt Corp | 0.01 | 0.92 | 0.91 |
| TVPC | Twin Vee Powercats Inc | 0.07 | -0.09 | -0.08 |
| Low | High | |
| Unlevered beta | -0.02 | 0.1 |
| Relevered beta | 0 | 0 |
| Adjusted relevered beta | 0.33 | 0.33 |
GNUS'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 GNUS:
cost_of_equity (6.50%) = risk_free_rate (4.45%) + equity_risk_premium (5.50%) * adjusted_beta (0.33) + 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.