STKS
One Group Hospitality Inc
Price:  
2.79 
USD
Volume:  
73,328.00
United States | Hotels, Restaurants & Leisure
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STKS WACC - Weighted Average Cost of Capital

The WACC of One Group Hospitality Inc (STKS) is 10.4%.

The Cost of Equity of One Group Hospitality Inc (STKS) is 8.60%.
The Cost of Debt of One Group Hospitality Inc (STKS) is 14.40%.

Range Selected
Cost of equity 6.30% - 10.90% 8.60%
Tax rate 19.60% - 29.80% 24.70%
Cost of debt 13.20% - 15.60% 14.40%
WACC 9.8% - 11.0% 10.4%
WACC

STKS WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.53 1.08
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.30% 10.90%
Tax rate 19.60% 29.80%
Debt/Equity ratio 3.88 3.88
Cost of debt 13.20% 15.60%
After-tax WACC 9.8% 11.0%
Selected WACC 10.4%

STKS'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 STKS:

cost_of_equity (8.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.53) + 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.