EXPE
Expedia Group Inc
Price:  
161.79 
USD
Volume:  
2,694,177.00
United States | Internet & Direct Marketing Retail
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Expedia WACC - Weighted Average Cost of Capital

The WACC of Expedia Group Inc (EXPE) is 7.1%.

The Cost of Equity of Expedia Group Inc (EXPE) is 8.30%.
The Cost of Debt of Expedia Group Inc (EXPE) is 4.45%.

Range Selected
Cost of equity 6.80% - 9.80% 8.30%
Tax rate 27.70% - 33.90% 30.80%
Cost of debt 4.00% - 4.90% 4.45%
WACC 5.9% - 8.3% 7.1%
WACC

Expedia WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.65 0.88
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.80% 9.80%
Tax rate 27.70% 33.90%
Debt/Equity ratio 0.31 0.31
Cost of debt 4.00% 4.90%
After-tax WACC 5.9% 8.3%
Selected WACC 7.1%

Expedia'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 Expedia:

cost_of_equity (8.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.65) + 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.