CDOR WACC - Weighted Average Cost of Capital
The WACC of Condor Hospitality Trust Inc (CDOR) is 9.9%.
| Range | Selected | |
| Cost of equity | 5.6% - 8.8% | 7.2% |
| Tax rate | 4.4% - 12.7% | 8.55% |
| Cost of debt | 5.3% - 20.6% | 12.95% |
| WACC | 5.3% - 14.4% | 9.9% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.57 | 0.89 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.6% | 8.8% |
| Tax rate | 4.4% | 12.7% |
| Debt/Equity ratio | 1.57 | 1.57 |
| Cost of debt | 5.3% | 20.6% |
| After-tax WACC | 5.3% | 14.4% |
| Selected WACC | 9.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CDOR | Condor Hospitality Trust Inc | 1.57 | 1.42 | 0.57 |
| CLDT | Chatham Lodging Trust | 1.13 | 0.38 | 0.18 |
| CORR | CorEnergy Infrastructure Trust Inc | 62.69 | 1.54 | 0.03 |
| DRH | Diamondrock Hospitality Co | 0.67 | 0.95 | 0.58 |
| FREVS | First Real Estate Investment Trust of New Jersey | 1.11 | 0.03 | 0.01 |
| GBCS | Global Healthcare REIT Inc | 4.1 | -0.89 | -0.18 |
| IHT | InnSuites Hospitality Trust | 0.54 | 0.17 | 0.11 |
| INN | Summit Hotel Properties Inc | 2.23 | 1.35 | 0.44 |
| MRTI | Maxus Realty Trust Inc | 2.99 | 0.33 | 0.09 |
| SOHO | Sotherly Hotels Inc | 8.91 | 0.43 | 0.05 |
| Low | High | |
| Unlevered beta | 0.07 | 0.14 |
| Relevered beta | 0.36 | 0.84 |
| Adjusted relevered beta | 0.57 | 0.89 |
CDOR'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 CDOR:
cost_of_equity (7.20%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.57) + 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.