HDSN WACC - Weighted Average Cost of Capital
The WACC of Hudson Technologies Inc (HDSN) is 7.4%.
| Range | Selected | |
| Cost of equity | 9.0% - 12.9% | 10.95% |
| Tax rate | 8.3% - 16.4% | 12.35% |
| Cost of debt | 4.5% - 4.5% | 4.5% |
| WACC | 6.6% - 8.3% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.12 | 1.43 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.0% | 12.9% |
| Tax rate | 8.3% | 16.4% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 4.5% | 4.5% |
| After-tax WACC | 6.6% | 8.3% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| HDSN | Hudson Technologies Inc | 1.03 | 0.87 | 0.45 |
| BRM.V | Biorem Inc | 0.09 | 0.93 | 0.86 |
| CECE | CECO Environmental Corp | 0.29 | 1.12 | 0.89 |
| GEVI | General Environmental Management Inc | 0.01 | 1.06 | 1.05 |
| MEEC | Midwest Energy Emissions Corp | 0.18 | 0.54 | 0.46 |
| NL | NL Industries Inc | 0 | 0.94 | 0.94 |
| SLUP | Solucorp Industries Ltd | 0.09 | 0 | 0 |
| TOMZ | TOMI Environmental Solutions Inc | 0.11 | 0.81 | 0.74 |
| USRI | USA Recycling Industries Inc | 0.27 | -0.19 | -0.15 |
| VIRC | Virco Mfg. Corp | 0.03 | 1.17 | 1.14 |
| VTX.V | Vertex Resource Group Ltd | 4.59 | -0.32 | -0.06 |
| Low | High | |
| Unlevered beta | 0.46 | 0.86 |
| Relevered beta | 1.18 | 1.64 |
| Adjusted relevered beta | 1.12 | 1.43 |
HDSN'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 HDSN:
cost_of_equity (10.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.12) + 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.