HDP.PA
Les Hotels de Paris SA
Price:  
2.2 
EUR
Volume:  
53
France | Hotels, Restaurants & Leisure

HDP.PA WACC - Weighted Average Cost of Capital

The WACC of Les Hotels de Paris SA (HDP.PA) is 4.7%.

The Cost of Equity of Les Hotels de Paris SA (HDP.PA) is 6.65%.
The Cost of Debt of Les Hotels de Paris SA (HDP.PA) is 5%.

RangeSelected
Cost of equity3.1% - 10.2%6.65%
Tax rate5.7% - 13.7%9.7%
Cost of debt5.0% - 5.0%5%
WACC4.6% - 4.9%4.7%
WACC

HDP.PA WACC calculation

CategoryLowHigh
Long-term bond rate3.0%3.5%
Equity market risk premium5.8%6.8%
Adjusted beta-0.490.47
Additional risk adjustments3.0%3.5%
Cost of equity3.1%10.2%
Tax rate5.7%13.7%
Debt/Equity ratio
9.189.18
Cost of debt5.0%5.0%
After-tax WACC4.6%4.9%
Selected WACC4.7%

HDP.PA'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 HDP.PA:

cost_of_equity (6.65%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (-0.49) + risk_adjustments (3.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.