HBB
Hamilton Beach Brands Holding Co
Price:  
17.68 
USD
Volume:  
15,760
United States | Household Durables

HBB WACC - Weighted Average Cost of Capital

The WACC of Hamilton Beach Brands Holding Co (HBB) is 8.0%.

The Cost of Equity of Hamilton Beach Brands Holding Co (HBB) is 8.75%.
The Cost of Debt of Hamilton Beach Brands Holding Co (HBB) is 5%.

RangeSelected
Cost of equity7.3% - 10.2%8.75%
Tax rate21.5% - 24.0%22.75%
Cost of debt5.0% - 5.0%5%
WACC6.8% - 9.1%8.0%
WACC

HBB WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.760.96
Additional risk adjustments0.0%0.5%
Cost of equity7.3%10.2%
Tax rate21.5%24.0%
Debt/Equity ratio
0.210.21
Cost of debt5.0%5.0%
After-tax WACC6.8%9.1%
Selected WACC8.0%

HBB WACC - Detailed calculations of Beta

LowHigh
Unlevered beta0.520.69
Relevered beta0.640.94
Adjusted relevered beta0.760.96

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 (8.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.76) + 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.