HBM.TO
Hudbay Minerals Inc
Price:  
14.34 
CAD
Volume:  
1,444,752.00
Canada | Metals & Mining
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HBM.TO WACC - Weighted Average Cost of Capital

The WACC of Hudbay Minerals Inc (HBM.TO) is 7.8%.

The Cost of Equity of Hudbay Minerals Inc (HBM.TO) is 9.10%.
The Cost of Debt of Hudbay Minerals Inc (HBM.TO) is 4.95%.

Range Selected
Cost of equity 7.70% - 10.50% 9.10%
Tax rate 24.10% - 37.60% 30.85%
Cost of debt 4.20% - 5.70% 4.95%
WACC 6.7% - 8.9% 7.8%
WACC

HBM.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.89 1.04
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.70% 10.50%
Tax rate 24.10% 37.60%
Debt/Equity ratio 0.3 0.3
Cost of debt 4.20% 5.70%
After-tax WACC 6.7% 8.9%
Selected WACC 7.8%

HBM.TO'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 HBM.TO:

cost_of_equity (9.10%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.89) + 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.