RICK
RCI Hospitality Holdings Inc
Price:  
40.97 
USD
Volume:  
25,177.00
United States | Hotels, Restaurants & Leisure
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RICK WACC - Weighted Average Cost of Capital

The WACC of RCI Hospitality Holdings Inc (RICK) is 7.2%.

The Cost of Equity of RCI Hospitality Holdings Inc (RICK) is 8.20%.
The Cost of Debt of RCI Hospitality Holdings Inc (RICK) is 6.85%.

Range Selected
Cost of equity 7.00% - 9.40% 8.20%
Tax rate 14.10% - 17.10% 15.60%
Cost of debt 6.10% - 7.60% 6.85%
WACC 6.3% - 8.2% 7.2%
WACC

RICK WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.67 0.8
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.00% 9.40%
Tax rate 14.10% 17.10%
Debt/Equity ratio 0.64 0.64
Cost of debt 6.10% 7.60%
After-tax WACC 6.3% 8.2%
Selected WACC 7.2%

RICK'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 RICK:

cost_of_equity (8.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.67) + 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.