YALA WACC - Weighted Average Cost of Capital
The WACC of Yalla Group Ltd (YALA) is 7.6%.
| Range | Selected | |
| Cost of equity | 8.6% - 12.0% | 10.3% |
| Tax rate | 2.3% - 2.7% | 2.5% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.7% - 8.4% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.02 | 1.28 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.6% | 12.0% |
| Tax rate | 2.3% | 2.7% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.7% | 8.4% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| YALA | Yalla Group Ltd | 1.18 | 1.06 | 0.49 |
| CARS | Cars.com Inc | 0.69 | 1.07 | 0.64 |
| EB | Eventbrite Inc | 1.02 | 0.84 | 0.42 |
| EGLX.TO | Enthusiast Gaming Holdings Inc | 3.24 | 1.93 | 0.46 |
| IZEA | IZEA Worldwide Inc | 0 | 1.15 | 1.14 |
| LKCO | Luokung Technology Corp | 70.04 | 0.11 | 0 |
| MAX | MediaAlpha Inc | 0.24 | 0.6 | 0.49 |
| RSS.V | Resaas Services Inc | 0 | 0.83 | 0.83 |
| SLGG | Super League Gaming, Inc. | 0.12 | 2.03 | 1.83 |
| YNDX | Yandex NV | 0.28 | 1.61 | 1.27 |
| YY | JOYY Inc | 0.03 | 0.56 | 0.54 |
| Low | High | |
| Unlevered beta | 0.49 | 0.64 |
| Relevered beta | 1.03 | 1.42 |
| Adjusted relevered beta | 1.02 | 1.28 |
YALA'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 YALA:
cost_of_equity (10.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.02) + 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.