WH
Wyndham Hotels & Resorts Inc
Price:  
84.29 
USD
Volume:  
951,506.00
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 7.1%.

The Cost of Equity of Wyndham Hotels & Resorts Inc (WH) is 8.30%.
The Cost of Debt of Wyndham Hotels & Resorts Inc (WH) is 4.95%.

Range Selected
Cost of equity 7.20% - 9.40% 8.30%
Tax rate 23.80% - 26.10% 24.95%
Cost of debt 4.60% - 5.30% 4.95%
WACC 6.2% - 7.9% 7.1%
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 0.73 0.81
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.20% 9.40%
Tax rate 23.80% 26.10%
Debt/Equity ratio 0.37 0.37
Cost of debt 4.60% 5.30%
After-tax WACC 6.2% 7.9%
Selected WACC 7.1%

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 (8.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.73) + 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.