The WACC of International Game Technology PLC (IGT) is 5.5%.
Range | Selected | |
Cost of equity | 8.0% - 11.9% | 9.95% |
Tax rate | 39.3% - 46.6% | 42.95% |
Cost of debt | 4.5% - 5.6% | 5.05% |
WACC | 4.7% - 6.3% | 5.5% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.89 | 1.26 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.0% | 11.9% |
Tax rate | 39.3% | 46.6% |
Debt/Equity ratio | 1.69 | 1.69 |
Cost of debt | 4.5% | 5.6% |
After-tax WACC | 4.7% | 6.3% |
Selected WACC | 5.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
IGT | International Game Technology PLC | 1.69 | 0.76 | 0.4 |
ACEL | Accel Entertainment Inc | 0.59 | 0.95 | 0.72 |
BALY | Bally's Corp | 6.77 | -0.13 | -0.03 |
CPHC | Canterbury Park Holding Corp | 0 | 0.14 | 0.14 |
FLL | Full House Resorts Inc | 3.49 | 1.33 | 0.46 |
GDEN | Golden Entertainment Inc | 0.53 | 0.93 | 0.73 |
GLXZ | Galaxy Gaming Inc | 0.77 | -0.66 | -0.47 |
RSI | Rush Street Interactive Inc | 0 | 1.08 | 1.08 |
SGMS | Scientific Games Corp | 1.55 | 1.85 | 1 |
TNA.V | Evergreen Gaming Corp | 0.15 | 1.02 | 0.95 |
Low | High | |
Unlevered beta | 0.43 | 0.72 |
Relevered beta | 0.84 | 1.39 |
Adjusted relevered beta | 0.89 | 1.26 |
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 IGT:
cost_of_equity (9.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.89) + 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.