HIBB WACC - Weighted Average Cost of Capital
The WACC of Hibbett Sports Inc (HIBB) is 8.8%.
| Range | Selected | |
| Cost of equity | 7.6% - 9.8% | 8.7% |
| Tax rate | 22.6% - 23.4% | 23% |
| Cost of debt | 4.5% - 26.2% | 15.35% |
| WACC | 7.4% - 10.2% | 8.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.8 | 0.87 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.6% | 9.8% |
| Tax rate | 22.6% | 23.4% |
| Debt/Equity ratio | 0.05 | 0.05 |
| Cost of debt | 4.5% | 26.2% |
| After-tax WACC | 7.4% | 10.2% |
| Selected WACC | 8.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| HIBB | Hibbett Sports Inc | 0.05 | 1.91 | 1.84 |
| BCI.TO | New Look Vision Group Inc | 0.47 | 1.05 | 0.77 |
| BGFV | Big 5 Sporting Goods Corp | 1.2 | 0.7 | 0.36 |
| BNED | Barnes & Noble Education Inc | 0.55 | 1.69 | 1.19 |
| ELA | Envela Corp | 0.08 | 0.63 | 0.59 |
| EYE | National Vision Holdings Inc | 0.26 | 0.96 | 0.8 |
| HZO | MarineMax Inc | 2.37 | 2.09 | 0.74 |
| RTON | Right On Brands Inc | 0.33 | 1.08 | 0.86 |
| SPWH | Sportsmans Warehouse Holdings Inc | 1.44 | -0.34 | -0.16 |
| TCS | Container Store Group Inc | 256.2 | 1.69 | 0.01 |
| Low | High | |
| Unlevered beta | 0.68 | 0.79 |
| Relevered beta | 0.7 | 0.81 |
| Adjusted relevered beta | 0.8 | 0.87 |
HIBB'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 HIBB:
cost_of_equity (8.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.8) + 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.