SAPX WACC - Weighted Average Cost of Capital
The WACC of Seven Arts Entertainment Inc (SAPX) is 3.8%.
| Range | Selected | |
| Cost of equity | 6.8% - 40.8% | 23.8% |
| Tax rate | 27.0% - 27.0% | 27% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 3.7% - 4.0% | 3.8% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.85 | 6.99 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.8% | 40.8% |
| Tax rate | 27.0% | 27.0% |
| Debt/Equity ratio | 99.78 | 99.78 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 3.7% | 4.0% |
| Selected WACC | 3.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SAPX | Seven Arts Entertainment Inc | 99.78 | 1.07 | 0.01 |
| AMRU | Amaru Inc | 6360.53 | 1.62 | 0 |
| BTDG | B2digital Inc | 1283.22 | 74.92 | 0.08 |
| GBHL | Global Entertainment Holdings Inc | 0.89 | -192.08 | -116.59 |
| GMEV | GME Innotainment Inc | 427.69 | 21.6 | 0.07 |
| HLWD | Almost Never Films Inc | 119.7 | 0.53 | 0.01 |
| MOCI | Modern Cinema Group Inc | 1.16 | 1.43 | 0.77 |
| NTEK | NanoTech Entertainment Inc | 284.92 | 0 | 0 |
| UMGP | Universal Media Group Inc | 6.4 | -0.44 | -0.08 |
| Low | High | |
| Unlevered beta | 0 | 0.01 |
| Relevered beta | 0.78 | 9.94 |
| Adjusted relevered beta | 0.85 | 6.99 |
SAPX'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 SAPX:
cost_of_equity (23.80%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.85) + 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.