XZL.SI WACC - Weighted Average Cost of Capital

The WACC of ARA US Hospitality Trust (XZL.SI) is 10.0%.

The Cost of Equity of ARA US Hospitality Trust (XZL.SI) is 10.95%.

The Cost of Debt of ARA US Hospitality Trust (XZL.SI) is 12.10%.

	Range	Selected
Cost of equity	8.70% - 13.20%	10.95%
Tax rate	15.80% - 21.60%	18.70%
Cost of debt	4.50% - 19.70%	12.10%
WACC	5.3% - 14.7%	10.0%

WACC

XZL.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	4.6%	5.6%
Adjusted beta	1.3	1.69

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.70%	13.20%

Tax rate	15.80%	21.60%
Debt/Equity ratio	2.12	2.12
Cost of debt	4.50%	19.70%

After-tax WACC	5.3%	14.7%


Selected WACC	10.0%

XZL.SI'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 XZL.SI:

cost_of_equity (10.95%) = risk_free_rate (2.95%) + equity_risk_premium (5.10%) * adjusted_beta (1.3) + 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.