HICN.TA WACC - Weighted Average Cost of Capital

The WACC of Highcon Systems Ltd (HICN.TA) is 8.6%.

The Cost of Equity of Highcon Systems Ltd (HICN.TA) is 45.55%.

The Cost of Debt of Highcon Systems Ltd (HICN.TA) is 6.50%.

	Range	Selected
Cost of equity	37.00% - 54.10%	45.55%
Tax rate	23.00% - 23.00%	23.00%
Cost of debt	6.00% - 7.00%	6.50%
WACC	7.5% - 9.7%	8.6%

WACC

HICN.TA WACC calculation

Category	Low	High

Long-term bond rate	4.8%	5.3%
Equity market risk premium	5.6%	6.6%
Adjusted beta	5.72	7.28

Additional risk adjustments	0.0%	0.5%
Cost of equity	37.00%	54.10%

Tax rate	23.00%	23.00%
Debt/Equity ratio	10.39	10.39
Cost of debt	6.00%	7.00%

After-tax WACC	7.5%	9.7%


Selected WACC	8.6%

HICN.TA'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 HICN.TA:

cost_of_equity (45.55%) = risk_free_rate (5.05%) + equity_risk_premium (6.10%) * adjusted_beta (5.72) + 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.