Hyatt WACC - Weighted Average Cost of Capital

The WACC of Hyatt Hotels Corp (H) is 7.1%.

The Cost of Equity of Hyatt Hotels Corp (H) is 8.30%.

The Cost of Debt of Hyatt Hotels Corp (H) is 4.55%.

	Range	Selected
Cost of equity	7.30% - 9.30%	8.30%
Tax rate	26.20% - 27.70%	26.95%
Cost of debt	4.30% - 4.80%	4.55%
WACC	6.3% - 7.9%	7.1%

WACC

Hyatt WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	0.75	0.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.30%	9.30%

Tax rate	26.20%	27.70%
Debt/Equity ratio	0.31	0.31
Cost of debt	4.30%	4.80%

After-tax WACC	6.3%	7.9%


Selected WACC	7.1%

Hyatt'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 Hyatt:

cost_of_equity (8.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.75) + 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.