SHCO
Soho House & Co Inc
Price:  
6.31 
USD
Volume:  
287,065.00
United States | Hotels, Restaurants & Leisure
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SHCO WACC - Weighted Average Cost of Capital

The WACC of Soho House & Co Inc (SHCO) is 11.8%.

The Cost of Equity of Soho House & Co Inc (SHCO) is 9.65%.
The Cost of Debt of Soho House & Co Inc (SHCO) is 15.10%.

Range Selected
Cost of equity 8.40% - 10.90% 9.65%
Tax rate 1.60% - 5.00% 3.30%
Cost of debt 6.30% - 23.90% 15.10%
WACC 7.4% - 16.1% 11.8%
WACC

SHCO WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.98 1.08
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.40% 10.90%
Tax rate 1.60% 5.00%
Debt/Equity ratio 0.8 0.8
Cost of debt 6.30% 23.90%
After-tax WACC 7.4% 16.1%
Selected WACC 11.8%

SHCO'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 SHCO:

cost_of_equity (9.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.98) + 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.