MSGM WACC - Weighted Average Cost of Capital
The WACC of Motorsport Games Inc (MSGM) is 6.8%.
| Range | Selected | |
| Cost of equity | 5.6% - 7.9% | 6.75% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 7.0% - 12.8% | 9.9% |
| WACC | 5.6% - 7.9% | 6.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.38 | 0.54 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.6% | 7.9% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 7.0% | 12.8% |
| After-tax WACC | 5.6% | 7.9% |
| Selected WACC | 6.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| MSGM | Motorsport Games Inc | 0 | -0.85 | -0.85 |
| ATVI | Activision Blizzard Inc | 0.05 | 0.45 | 0.43 |
| EA | Electronic Arts Inc | 0.05 | 0.34 | 0.33 |
| GAME.V | Engine Media Holdings Inc | 1.22 | 0.56 | 0.3 |
| GMGI | Golden Matrix Group Inc | 0.17 | 0.13 | 0.12 |
| IPUB | indiePub Entertainment Inc | 2571.57 | 0 | 0 |
| NCTY | The9 Ltd | 0.13 | 1.32 | 1.21 |
| NTES | NetEase Inc | 0.02 | 0.39 | 0.38 |
| PLGC | Playlogic Entertainment Inc | 5.55 | 0 | 0 |
| ZNGA | Zynga Inc | 0.14 | 0.02 | 0.02 |
| Low | High | |
| Unlevered beta | 0.08 | 0.31 |
| Relevered beta | 0.07 | 0.31 |
| Adjusted relevered beta | 0.38 | 0.54 |
MSGM'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 MSGM:
cost_of_equity (6.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.38) + 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.