The WACC of Hero Technologies Inc (HENC) is 6.1%.
Range | Selected | |
Cost of equity | 31.8% - 45.5% | 38.65% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.7% - 6.6% | 6.1% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 6.08 | 7.26 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 31.8% | 45.5% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 13.12 | 13.12 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.7% | 6.6% |
Selected WACC | 6.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
HENC | Hero Technologies Inc | 13.12 | 155.08 | 14.66 |
IFNY | Infinity Energy Resources Inc | 0.57 | 1.67 | 1.18 |
IFR.V | International Frontier Resources Corp | 0.06 | 0.9 | 0.87 |
MAH.V | Marksmen Energy Inc | 1.21 | -1.38 | -0.73 |
NRIS | Norris Industries Inc | 0.65 | 1.99 | 1.36 |
PCQ.V | Petrolympic Ltd | 0 | -0.96 | -0.95 |
PRE.V | Paleo Resources Inc | 0.58 | 1.05 | 0.74 |
ROK.V | ROK Resources Inc | 0.37 | 2.04 | 1.61 |
SNV.V | Sonoro Energy Ltd | 0.04 | 0.75 | 0.73 |
SPI.V | Canadian Spirit Resources Inc | 0 | 0.96 | 0.95 |
Low | High | |
Unlevered beta | 0.81 | 1.04 |
Relevered beta | 8.58 | 10.34 |
Adjusted relevered beta | 6.08 | 7.26 |
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 HENC:
cost_of_equity (38.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (6.08) + 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.