PRKA
Parks! America Inc
Price:  
35.00 
USD
Volume:  
780.00
United States | Hotels, Restaurants & Leisure
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PRKA WACC - Weighted Average Cost of Capital

The WACC of Parks! America Inc (PRKA) is 6.0%.

The Cost of Equity of Parks! America Inc (PRKA) is 6.35%.
The Cost of Debt of Parks! America Inc (PRKA) is 4.80%.

Range Selected
Cost of equity 5.40% - 7.30% 6.35%
Tax rate 24.60% - 25.50% 25.05%
Cost of debt 4.50% - 5.10% 4.80%
WACC 5.1% - 6.8% 6.0%
WACC

PRKA WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.33 0.43
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.40% 7.30%
Tax rate 24.60% 25.50%
Debt/Equity ratio 0.13 0.13
Cost of debt 4.50% 5.10%
After-tax WACC 5.1% 6.8%
Selected WACC 6.0%

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 (6.35%) = 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.