HBB WACC - Weighted Average Cost of Capital
The WACC of Hamilton Beach Brands Holding Co (HBB) is 7.9%.
| Range | Selected | |
| Cost of equity | 7.2% - 10.2% | 8.7% |
| Tax rate | 21.5% - 24.0% | 22.75% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.7% - 9.1% | 7.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.74 | 0.94 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.2% | 10.2% |
| Tax rate | 21.5% | 24.0% |
| Debt/Equity ratio | 0.21 | 0.21 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.7% | 9.1% |
| Selected WACC | 7.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| HBB | Hamilton Beach Brands Holding Co | 0.21 | 0.61 | 0.53 |
| CLIQ.TO | Alcanna Inc | 0.72 | 1.55 | 1 |
| HOFT | Hooker Furniture Corp | 0.17 | 1.13 | 1 |
| KIRK | Kirkland's Inc | 2.4 | 1.37 | 0.48 |
| LIVE | Live Ventures Inc | 5.77 | -0.47 | -0.09 |
| MCCK | Mestek Inc | 0.04 | 0.48 | 0.47 |
| PRPL | Purple Innovation Inc | 0.72 | 1.53 | 0.98 |
| QEPC | QEP Co Inc | 0 | 0.51 | 0.51 |
| VIOT | Viomi Technology Co Ltd | 0.24 | 0.82 | 0.69 |
| Low | High | |
| Unlevered beta | 0.51 | 0.66 |
| Relevered beta | 0.61 | 0.91 |
| Adjusted relevered beta | 0.74 | 0.94 |
HBB'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 HBB:
cost_of_equity (8.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.74) + 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.