HAMP.IC WACC - Weighted Average Cost of Capital

The WACC of Hampidjan hf (HAMP.IC) is 13.4%.

The Cost of Equity of Hampidjan hf (HAMP.IC) is 15.20%.

The Cost of Debt of Hampidjan hf (HAMP.IC) is 9.50%.

	Range	Selected
Cost of equity	13.60% - 16.80%	15.20%
Tax rate	18.60% - 19.50%	19.05%
Cost of debt	6.70% - 12.30%	9.50%
WACC	11.7% - 15.2%	13.4%

WACC

HAMP.IC WACC calculation

Category	Low	High

Long-term bond rate	7.1%	7.6%
Equity market risk premium	6.3%	7.3%
Adjusted beta	1.03	1.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.60%	16.80%

Tax rate	18.60%	19.50%
Debt/Equity ratio	0.32	0.32
Cost of debt	6.70%	12.30%

After-tax WACC	11.7%	15.2%


Selected WACC	13.4%

HAMP.IC'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 HAMP.IC:

cost_of_equity (15.20%) = risk_free_rate (7.35%) + equity_risk_premium (6.80%) * adjusted_beta (1.03) + 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.