HASI WACC - Weighted Average Cost of Capital

The WACC of Hannon Armstrong Sustainable Infrastructure Capital Inc (HASI) is 5.6%.

The Cost of Equity of Hannon Armstrong Sustainable Infrastructure Capital Inc (HASI) is 6.50%.

The Cost of Debt of Hannon Armstrong Sustainable Infrastructure Capital Inc (HASI) is 5.75%.

	Range	Selected
Cost of equity	5.60% - 7.40%	6.50%
Tax rate	13.80% - 15.90%	14.85%
Cost of debt	4.50% - 7.00%	5.75%
WACC	4.6% - 6.5%	5.6%

WACC

HASI WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	0.39	0.45

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	7.40%

Tax rate	13.80%	15.90%
Debt/Equity ratio	1.35	1.35
Cost of debt	4.50%	7.00%

After-tax WACC	4.6%	6.5%


Selected WACC	5.6%

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 (6.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.39) + 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.