BHR
Braemar Hotels & Resorts Inc
Price:  
2.28 
USD
Volume:  
224,334.00
United States | Equity Real Estate Investment Trusts (REITs)
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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 14.80%.

Range Selected
Cost of equity 12.40% - 23.90% 18.15%
Tax rate 4.10% - 6.30% 5.20%
Cost of debt 5.70% - 23.90% 14.80%
WACC 6.2% - 22.5% 14.4%
WACC

BHR WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.84 3.4
Additional risk adjustments 0.0% 0.5%
Cost of equity 12.40% 23.90%
Tax rate 4.10% 6.30%
Debt/Equity ratio 7.92 7.92
Cost of debt 5.70% 23.90%
After-tax WACC 6.2% 22.5%
Selected WACC 14.4%

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.