HENC WACC - Weighted Average Cost of Capital
The WACC of Hero Technologies Inc (HENC) is 5.9%.
| Range | Selected | |
| Cost of equity | 26.3% - 44.9% | 35.6% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.3% - 6.6% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 4.87 | 7.14 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 26.3% | 44.9% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 13.12 | 13.12 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.3% | 6.6% |
| Selected WACC | 5.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| HENC | Hero Technologies Inc | 13.12 | 135.99 | 12.86 |
| FECOF | FEC Resources Inc | 0.2 | 0.17 | 0.15 |
| IFNY | Infinity Energy Resources Inc | 0.57 | 1.67 | 1.18 |
| IFR.V | International Frontier Resources Corp | 0.06 | 0.97 | 0.93 |
| MAH.V | Marksmen Energy Inc | 1.24 | -1.38 | -0.73 |
| NRIS | Norris Industries Inc | 0.71 | 1.63 | 1.07 |
| PCQ.V | Petrolympic Ltd | 0 | -1.14 | -1.14 |
| PRE.V | Paleo Resources Inc | 0.58 | 1.05 | 0.74 |
| SNV.V | Sonoro Energy Ltd | 0.04 | 0.53 | 0.52 |
| SPI.V | Canadian Spirit Resources Inc | 0 | 1.09 | 1.08 |
| Low | High | |
| Unlevered beta | 0.65 | 0.99 |
| Relevered beta | 6.78 | 10.16 |
| Adjusted relevered beta | 4.87 | 7.14 |
HENC'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 HENC:
cost_of_equity (35.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (4.87) + 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.