HCCI WACC - Weighted Average Cost of Capital
The WACC of Heritage-Crystal Clean Inc (HCCI) is 6.9%.
| Range | Selected | |
| Cost of equity | 6.2% - 8.5% | 7.35% |
| Tax rate | 26.6% - 26.7% | 26.65% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.8% - 8.0% | 6.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.5 | 0.66 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.2% | 8.5% |
| Tax rate | 26.6% | 26.7% |
| Debt/Equity ratio | 0.12 | 0.12 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.8% | 8.0% |
| Selected WACC | 6.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| HCCI | Heritage-Crystal Clean Inc | 0.12 | 0.31 | 0.28 |
| AWX | Avalon Holdings Corp | 3.53 | 0.03 | 0.01 |
| BLM.V | Blumetric Environmental Inc | 0.05 | 1.28 | 1.23 |
| BNET | Bion Environmental Technologies Inc | 0.36 | 1.78 | 1.41 |
| CHRA | Charah Solutions Inc | 9.29 | 1.15 | 0.15 |
| EWS.V | Environmental Waste International Inc | 2.54 | 1.03 | 0.36 |
| KUT.V | Redishred Capital Corp (Pre-Merger) | 0.39 | 0.01 | 0.01 |
| PESI | Perma-Fix Environmental Services Inc | 0.02 | 1.19 | 1.17 |
| QRHC | Quest Resource Holding Corp | 1.52 | 1.23 | 0.58 |
| USLQ | U S Liquids Inc | 4.53 | 0 | 0 |
| Low | High | |
| Unlevered beta | 0.23 | 0.45 |
| Relevered beta | 0.25 | 0.49 |
| Adjusted relevered beta | 0.5 | 0.66 |
HCCI'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 HCCI:
cost_of_equity (7.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.5) + 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.