BHR
Braemar Hotels & Resorts Inc
Price:  
2.28 
USD
Volume:  
224,334
United States | Equity Real Estate Investment Trusts (REITs)

BHR WACC - Weighted Average Cost of Capital

The WACC of Braemar Hotels & Resorts Inc (BHR) is 14.4%.

The Cost of Equity of Braemar Hotels & Resorts Inc (BHR) is 18.15%.
The Cost of Debt of Braemar Hotels & Resorts Inc (BHR) is 14.8%.

RangeSelected
Cost of equity12.4% - 23.9%18.15%
Tax rate4.1% - 6.3%5.2%
Cost of debt5.7% - 23.9%14.8%
WACC6.2% - 22.5%14.4%
WACC

BHR WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta1.843.4
Additional risk adjustments0.0%0.5%
Cost of equity12.4%23.9%
Tax rate4.1%6.3%
Debt/Equity ratio
7.927.92
Cost of debt5.7%23.9%
After-tax WACC6.2%22.5%
Selected WACC14.4%

BHR'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 BHR:

cost_of_equity (18.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.84) + 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.