AHH
Armada Hoffler Properties Inc
Price:  
6.81 
USD
Volume:  
1,166,957.00
United States | Equity Real Estate Investment Trusts (REITs)
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

AHH WACC - Weighted Average Cost of Capital

The WACC of Armada Hoffler Properties Inc (AHH) is 7.9%.

The Cost of Equity of Armada Hoffler Properties Inc (AHH) is 7.50%.
The Cost of Debt of Armada Hoffler Properties Inc (AHH) is 8.20%.

Range Selected
Cost of equity 5.80% - 9.20% 7.50%
Tax rate 1.20% - 2.00% 1.60%
Cost of debt 4.00% - 12.40% 8.20%
WACC 4.6% - 11.1% 7.9%
WACC

AHH WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.43 0.78
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.80% 9.20%
Tax rate 1.20% 2.00%
Debt/Equity ratio 1.96 1.96
Cost of debt 4.00% 12.40%
After-tax WACC 4.6% 11.1%
Selected WACC 7.9%

AHH'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 AHH:

cost_of_equity (7.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.43) + 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.