NHH.MC WACC - Weighted Average Cost of Capital
The WACC of NH Hotel Group SA (NHH.MC) is 5.6%.
| Range | Selected | |
| Cost of equity | 6.0% - 9.3% | 7.65% |
| Tax rate | 16.9% - 24.7% | 20.8% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 4.7% - 6.5% | 5.6% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 7.4% | 8.4% |
| Adjusted beta | 0.39 | 0.62 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.0% | 9.3% |
| Tax rate | 16.9% | 24.7% |
| Debt/Equity ratio | 0.9 | 0.9 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 4.7% | 6.5% |
| Selected WACC | 5.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| NHH.MC | NH Hotel Group SA | 0.9 | -0.45 | -0.26 |
| DHG.IR | Dalata Hotel Group PLC | 0.92 | 1.49 | 0.85 |
| HDP.PA | Les Hotels de Paris SA | 11.02 | 0.17 | 0.02 |
| LAMPS.AT | Lampsa Hellenic Hotels SA | 0.16 | 0.07 | 0.06 |
| MEL.MC | Melia Hotels International SA | 1.65 | 0.84 | 0.36 |
| NTHOL.IS | Net Holding AS | 0.66 | 0.88 | 0.57 |
| ODHN.SW | Orascom Development Holding AG | 1.48 | -0.38 | -0.17 |
| PNDX B.ST | Pandox AB | 1.21 | 0.46 | 0.23 |
| PPH.L | PPHE Hotel Group Ltd | 2 | 0.12 | 0.05 |
| SHOT.ST | Scandic Hotels Group AB | 2.68 | 0.86 | 0.27 |
| Low | High | |
| Unlevered beta | 0.05 | 0.25 |
| Relevered beta | 0.09 | 0.43 |
| Adjusted relevered beta | 0.39 | 0.62 |
NHH.MC'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 NHH.MC:
cost_of_equity (7.65%) = risk_free_rate (3.35%) + equity_risk_premium (7.90%) * adjusted_beta (0.39) + 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.