LTRPA WACC - Weighted Average Cost of Capital
The WACC of Liberty Tripadvisor Holdings Inc (LTRPA) is 5.8%.
| Range | Selected | |
| Cost of equity | 10.6% - 56.9% | 33.75% |
| Tax rate | 12.2% - 29.2% | 20.7% |
| Cost of debt | 4.7% - 9.1% | 6.9% |
| WACC | 4.3% - 7.3% | 5.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.46 | 9.29 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.6% | 56.9% |
| Tax rate | 12.2% | 29.2% |
| Debt/Equity ratio | 59.74 | 59.74 |
| Cost of debt | 4.7% | 9.1% |
| After-tax WACC | 4.3% | 7.3% |
| Selected WACC | 5.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LTRPA | Liberty Tripadvisor Holdings Inc | 59.74 | 1.04 | 0.02 |
| CARS | Cars.com Inc | 0.71 | 1.07 | 0.67 |
| LKCO | Luokung Technology Corp | 70.04 | 0.11 | 0 |
| LOV | Spark Networks SE | 20.48 | 0.45 | 0.02 |
| MAX | MediaAlpha Inc | 0.24 | 0.71 | 0.59 |
| MFON | Mobivity Holdings Corp | 0.43 | -0.2 | -0.14 |
| MOMO | Momo Inc | 0.6 | 0.48 | 0.32 |
| MTCH | Match Group Inc | 0.54 | 0.32 | 0.22 |
| SFUN | Fang Holdings Ltd | 28.89 | 1.01 | 0.04 |
| YY | JOYY Inc | 0.03 | 0.56 | 0.55 |
| Low | High | |
| Unlevered beta | 0.03 | 0.26 |
| Relevered beta | 1.69 | 13.37 |
| Adjusted relevered beta | 1.46 | 9.29 |
LTRPA'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 LTRPA:
cost_of_equity (33.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.46) + 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.