PRKA WACC - Weighted Average Cost of Capital
The WACC of Parks! America Inc (PRKA) is 5.9%.
| Range | Selected | |
| Cost of equity | 5.4% - 7.1% | 6.25% |
| Tax rate | 24.6% - 25.5% | 25.05% |
| Cost of debt | 4.5% - 5.1% | 4.8% |
| WACC | 5.2% - 6.7% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.33 | 0.39 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.4% | 7.1% |
| Tax rate | 24.6% | 25.5% |
| Debt/Equity ratio | 0.12 | 0.12 |
| Cost of debt | 4.5% | 5.1% |
| After-tax WACC | 5.2% | 6.7% |
| Selected WACC | 5.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PRKA | Parks! America Inc | 0.12 | 0.67 | 0.61 |
| AAP.H.V | Alpha Peak Leisure Inc | 0.02 | 0.96 | 0.94 |
| CLUBQ | Town Sports International Holdings Inc | 63244.87 | 1.57 | 0 |
| DS | Drive Shack Inc | 3.99 | 1.45 | 0.36 |
| GLXZ | Galaxy Gaming Inc | 0.78 | -0.71 | -0.45 |
| ICE.TO | Canlan Ice Sports Corp | 0.91 | -0.01 | -0.01 |
| PRXIQ | Premier Exhibitions Inc | 11307.69 | -0.95 | 0 |
| TWC.TO | TWC Enterprises Ltd | 0.07 | 0.22 | 0.21 |
| AAB.CO | Aalborg Boldspilklub A/S | 0.41 | -0.01 | 0 |
| Low | High | |
| Unlevered beta | 0 | 0.16 |
| Relevered beta | 0 | 0.09 |
| Adjusted relevered beta | 0.33 | 0.39 |
PRKA'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 PRKA:
cost_of_equity (6.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * 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.