HHC
Howard Hughes Corp
Price:  
78.76 
USD
Volume:  
113,923.00
United States | Real Estate Management & Development
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HHC WACC - Weighted Average Cost of Capital

The WACC of Howard Hughes Corp (HHC) is 7.8%.

The Cost of Equity of Howard Hughes Corp (HHC) is 8.10%.
The Cost of Debt of Howard Hughes Corp (HHC) is 10.15%.

Range Selected
Cost of equity 5.70% - 10.50% 8.10%
Tax rate 24.30% - 26.10% 25.20%
Cost of debt 4.70% - 15.60% 10.15%
WACC 4.5% - 11.1% 7.8%
WACC

HHC WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.41 1
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.70% 10.50%
Tax rate 24.30% 26.10%
Debt/Equity ratio 1.2 1.2
Cost of debt 4.70% 15.60%
After-tax WACC 4.5% 11.1%
Selected WACC 7.8%

HHC'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 HHC:

cost_of_equity (8.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.41) + 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.