The WACC of Humble & Fume Inc (HMBL.CN) is 8.6%.
| Range | Selected | |
| Cost of equity | 5.30% - 6.20% | 5.75% |
| Tax rate | 0.50% - 1.10% | 0.80% |
| Cost of debt | 7.00% - 12.20% | 9.60% |
| WACC | 6.5% - 10.7% | 8.6% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | -0.08 | -0.08 |
| Additional risk adjustments | 2.5% | 3.0% |
| Cost of equity | 5.30% | 6.20% |
| Tax rate | 0.50% | 1.10% |
| Debt/Equity ratio | 3.1 | 3.1 |
| Cost of debt | 7.00% | 12.20% |
| After-tax WACC | 6.5% | 10.7% |
| Selected WACC | 8.6% | |
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 HMBL.CN:
cost_of_equity (5.75%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (-0.08) + risk_adjustments (2.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.