BOH
Bank of Hawaii Corp
Price:  
68.40 
USD
Volume:  
390,963.00
United States | Banks
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BOH WACC - Weighted Average Cost of Capital

The WACC of Bank of Hawaii Corp (BOH) is 8.6%.

The Cost of Equity of Bank of Hawaii Corp (BOH) is 8.85%.
The Cost of Debt of Bank of Hawaii Corp (BOH) is 5.00%.

Range Selected
Cost of equity 7.80% - 9.90% 8.85%
Tax rate 22.20% - 23.10% 22.65%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.6% - 9.6% 8.6%
WACC

BOH WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.85 0.89
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.80% 9.90%
Tax rate 22.20% 23.10%
Debt/Equity ratio 0.04 0.04
Cost of debt 5.00% 5.00%
After-tax WACC 7.6% 9.6%
Selected WACC 8.6%

BOH'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 BOH:

cost_of_equity (8.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.85) + 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.