HASI WACC - Weighted Average Cost of Capital
The WACC of Hannon Armstrong Sustainable Infrastructure Capital Inc (HASI) is 5.6%.
| Range | Selected | |
| Cost of equity | 5.6% - 7.5% | 6.55% |
| Tax rate | 13.8% - 15.9% | 14.85% |
| Cost of debt | 4.5% - 7.0% | 5.75% |
| WACC | 4.6% - 6.6% | 5.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.38 | 0.46 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.6% | 7.5% |
| Tax rate | 13.8% | 15.9% |
| Debt/Equity ratio | 1.31 | 1.31 |
| Cost of debt | 4.5% | 7.0% |
| After-tax WACC | 4.6% | 6.6% |
| Selected WACC | 5.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| HASI | Hannon Armstrong Sustainable Infrastructure Capital Inc | 1.31 | 0.31 | 0.15 |
| ACR | Acres Commercial Realty Corp | 10.43 | 0.19 | 0.02 |
| ARI | Apollo Commercial Real Estate Finance Inc | 4.69 | 0.6 | 0.12 |
| BXMT | Blackstone Mortgage Trust Inc | 4.65 | 0.68 | 0.14 |
| CHMI | Cherry Hill Mortgage Investment Corp | 12.41 | 0.06 | 0 |
| LOAN | Manhattan Bridge Capital Inc | 0.37 | -0.16 | -0.12 |
| MFA | MFA Financial Inc | 9.25 | 0.44 | 0.05 |
| NRZ | New Residential Investment Corp | 4.31 | 1.67 | 0.36 |
| NYMT | New York Mortgage Trust Inc | 12.59 | 0.88 | 0.08 |
| SACH | Sachem Capital Corp | 5.4 | -0.01 | 0 |
| Low | High | |
| Unlevered beta | 0.04 | 0.09 |
| Relevered beta | 0.07 | 0.19 |
| Adjusted relevered beta | 0.38 | 0.46 |
HASI'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 HASI:
cost_of_equity (6.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.38) + 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.