The WACC of Accor SA (AC.PA) is 6.4%.
Range | Selected | |
Cost of equity | 6.3% - 8.2% | 7.25% |
Tax rate | 12.2% - 19.0% | 15.6% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 5.6% - 7.1% | 6.4% |
Category | Low | High |
Long-term bond rate | 3.0% | 3.5% |
Equity market risk premium | 5.8% | 6.8% |
Adjusted beta | 0.58 | 0.62 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.3% | 8.2% |
Tax rate | 12.2% | 19.0% |
Debt/Equity ratio | 0.33 | 0.33 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 5.6% | 7.1% |
Selected WACC | 6.4% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
AC.PA | Accor SA | 0.33 | 1.31 | 1.03 |
DHG.IR | Dalata Hotel Group PLC | 0.77 | 1.49 | 0.91 |
IHG.L | InterContinental Hotels Group PLC | 0.21 | 1.06 | 0.9 |
MEL.MC | Melia Hotels International SA | 1.48 | 0.89 | 0.4 |
NHH.MC | NH Hotel Group SA | 0.89 | -0.41 | -0.23 |
ODHN.SW | Orascom Development Holding AG | 1.48 | -0.36 | -0.16 |
PNDX B.ST | Pandox AB | 1.18 | 0.61 | 0.31 |
SHOT.ST | Scandic Hotels Group AB | 2.61 | 0.91 | 0.29 |
VAC.PA | Pierre et Vacances SA | 3.96 | 0.88 | 0.2 |
WTB.L | Whitbread PLC | 1.16 | 0.57 | 0.29 |
Low | High | |
Unlevered beta | 0.29 | 0.34 |
Relevered beta | 0.37 | 0.43 |
Adjusted relevered beta | 0.58 | 0.62 |
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 AC.PA:
cost_of_equity (7.25%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (0.58) + 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.