526761.BO WACC - Weighted Average Cost of Capital

The WACC of Howard Hotels Ltd (526761.BO) is 12.6%.

The Cost of Equity of Howard Hotels Ltd (526761.BO) is 12.70%.

The Cost of Debt of Howard Hotels Ltd (526761.BO) is 16.70%.

	Range	Selected
Cost of equity	11.20% - 14.20%	12.70%
Tax rate	18.60% - 28.90%	23.75%
Cost of debt	6.50% - 26.90%	16.70%
WACC	10.1% - 15.1%	12.6%

WACC

526761.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.53	0.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.20%	14.20%

Tax rate	18.60%	28.90%
Debt/Equity ratio	0.24	0.24
Cost of debt	6.50%	26.90%

After-tax WACC	10.1%	15.1%


Selected WACC	12.6%

526761.BO'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 526761.BO:

cost_of_equity (12.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * 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.