XHR
Xenia Hotels & Resorts Inc
Price:  
11.58 
USD
Volume:  
626,233.00
United States | Equity Real Estate Investment Trusts (REITs)
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XHR WACC - Weighted Average Cost of Capital

The WACC of Xenia Hotels & Resorts Inc (XHR) is 9.3%.

The Cost of Equity of Xenia Hotels & Resorts Inc (XHR) is 10.45%.
The Cost of Debt of Xenia Hotels & Resorts Inc (XHR) is 9.05%.

Range Selected
Cost of equity 9.10% - 11.80% 10.45%
Tax rate 5.50% - 7.60% 6.55%
Cost of debt 5.70% - 12.40% 9.05%
WACC 7.1% - 11.6% 9.3%
WACC

XHR WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.13 1.23
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.10% 11.80%
Tax rate 5.50% 7.60%
Debt/Equity ratio 1.14 1.14
Cost of debt 5.70% 12.40%
After-tax WACC 7.1% 11.6%
Selected WACC 9.3%

XHR'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 XHR:

cost_of_equity (10.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.13) + 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.