Question 1

What is Sunstone Hotel Investors, Inc.'s WACC?

Accepted Answer

Sunstone Hotel Investors, Inc. (SHO) has a Weighted Average Cost of Capital (WACC) of 7.54%. This is calculated using a Cost of Equity of 8.93% (via CAPM with a beta of 1.11) and a pre-tax Cost of Debt of 5.96%, with an equity weight of 67.24% in the capital structure.

Question 2

Is Sunstone Hotel Investors, Inc.'s WACC high or low?

Accepted Answer

Sunstone Hotel Investors, Inc.'s WACC of 7.54% is below the typical range of 8-12% for most companies, indicating relatively low cost of capital and lower risk. WACC is used as the discount rate in DCF valuations — a lower WACC results in higher present values of future cash flows.

Question 3

How is Sunstone Hotel Investors, Inc.'s WACC calculated?

Accepted Answer

Sunstone Hotel Investors, Inc.'s WACC is calculated using the formula: WACC = (E/V × Re) + (D/V × Rd × (1-T)). The Cost of Equity (Re) of 8.93% is derived from the CAPM model using a beta of 1.11. The pre-tax Cost of Debt (Rd) is 5.96%. The capital structure is 67.24% equity and 32.76% debt.

Sunstone Hotel Investors, Inc. (SHO) — WACC 分析

WACC 构成

解读

Sunstone Hotel Investors, Inc.（SHO）WACC：7.54%

WACC计算器

Sunstone Hotel Investors, Inc.（SHO） WACC 解读

SHO 公司分析

SHO DCF 估值

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