WH
Wyndham Hotels & Resorts Inc
Price:  
88.74 
USD
Volume:  
1,509,052.00
United States | Hotels, Restaurants & Leisure
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WH WACC - Weighted Average Cost of Capital

The WACC of Wyndham Hotels & Resorts Inc (WH) is 7.3%.

The Cost of Equity of Wyndham Hotels & Resorts Inc (WH) is 8.55%.
The Cost of Debt of Wyndham Hotels & Resorts Inc (WH) is 4.95%.

Range Selected
Cost of equity 7.50% - 9.60% 8.55%
Tax rate 23.80% - 26.10% 24.95%
Cost of debt 4.60% - 5.30% 4.95%
WACC 6.4% - 8.1% 7.3%
WACC

WH WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.78 0.85
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.50% 9.60%
Tax rate 23.80% 26.10%
Debt/Equity ratio 0.36 0.36
Cost of debt 4.60% 5.30%
After-tax WACC 6.4% 8.1%
Selected WACC 7.3%

WH'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 WH:

cost_of_equity (8.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.78) + 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.