MLCO
Melco Resorts & Entertainment Ltd
Price:  
8.56 
USD
Volume:  
2,504,381
Hong Kong | Hotels, Restaurants & Leisure

MLCO WACC - Weighted Average Cost of Capital

The WACC of Melco Resorts & Entertainment Ltd (MLCO) is 6.4%.

The Cost of Equity of Melco Resorts & Entertainment Ltd (MLCO) is 9.4%.
The Cost of Debt of Melco Resorts & Entertainment Ltd (MLCO) is 5.3%.

RangeSelected
Cost of equity7.7% - 11.1%9.4%
Tax rate0.4% - 1.6%1%
Cost of debt5.1% - 5.5%5.3%
WACC5.8% - 7.0%6.4%
WACC

MLCO WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.841.11
Additional risk adjustments0.0%0.5%
Cost of equity7.7%11.1%
Tax rate0.4%1.6%
Debt/Equity ratio
2.532.53
Cost of debt5.1%5.5%
After-tax WACC5.8%7.0%
Selected WACC6.4%

MLCO'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 MLCO:

cost_of_equity (9.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.84) + 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.