JAKK WACC - Weighted Average Cost of Capital
The WACC of JAKKS Pacific Inc (JAKK) is 7.8%.
| Range | Selected | |
| Cost of equity | 10.3% - 13.2% | 11.75% |
| Tax rate | 10.4% - 14.4% | 12.4% |
| Cost of debt | 4.5% - 4.5% | 4.5% |
| WACC | 7.1% - 8.5% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.39 | 1.5 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.3% | 13.2% |
| Tax rate | 10.4% | 14.4% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 4.5% | 4.5% |
| After-tax WACC | 7.1% | 8.5% |
| Selected WACC | 7.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| JAKK | JAKKS Pacific Inc | 1.05 | 0.92 | 0.48 |
| CLAR | Clarus Corp | 0.01 | 0.82 | 0.81 |
| ELY | Callaway Golf Co | 0.3 | 1.75 | 1.39 |
| ESCA | Escalade Inc | 0.15 | 0.72 | 0.64 |
| GOLF | Acushnet Holdings Corp | 0.16 | 0.88 | 0.77 |
| LEAT | Leatt Corp | 0.01 | 0.95 | 0.94 |
| MCFT | Mastercraft Boat Holdings Inc | 0.15 | 1.05 | 0.93 |
| NLS | Nautilus Inc | 0.96 | 1.59 | 0.87 |
| SWBI | Smith & Wesson Brands Inc | 0.32 | 0.53 | 0.42 |
| TOY.TO | Spin Master Corp | 0.28 | 1.18 | 0.95 |
| YETI | Yeti Holdings Inc | 0.03 | 1.21 | 1.18 |
| Low | High | |
| Unlevered beta | 0.81 | 0.93 |
| Relevered beta | 1.58 | 1.75 |
| Adjusted relevered beta | 1.39 | 1.5 |
JAKK'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 JAKK:
cost_of_equity (11.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.39) + 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.