HMSO.L WACC - Weighted Average Cost of Capital
The WACC of Hammerson PLC (HMSO.L) is 11.2%.
| Range | Selected | |
| Cost of equity | 6.4% - 8.9% | 7.65% |
| Tax rate | 0.2% - 0.6% | 0.4% |
| Cost of debt | 4.5% - 24.0% | 14.25% |
| WACC | 5.4% - 16.9% | 11.2% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.4 | 0.56 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.4% | 8.9% |
| Tax rate | 0.2% | 0.6% |
| Debt/Equity ratio | 1.16 | 1.16 |
| Cost of debt | 4.5% | 24.0% |
| After-tax WACC | 5.4% | 16.9% |
| Selected WACC | 11.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| HMSO.L | Hammerson PLC | 1.16 | 1.21 | 0.56 |
| CAPC.L | Capital & Counties Properties PLC | 0.67 | 1.36 | 0.82 |
| ECMPA.AS | Eurocommercial Properties NV | 1.1 | 0.51 | 0.25 |
| FREY.PA | Frey SA | 1.36 | 0.08 | 0.03 |
| MERY.PA | Mercialys SA | 1.29 | 0.23 | 0.1 |
| RET.BR | Retail Estates NV | 0.95 | 0.55 | 0.28 |
| SELER.PA | Selectirente SA | 0.6 | 0.06 | 0.04 |
| YGGYO.IS | Yeni Gimat Gayrimenkul Yatirim Ortakligi AS | 0 | 0.05 | 0.05 |
| YMEI.MC | Mercal Inmuebles SOCIMI SA | 0.47 | -0.01 | -0.01 |
| YORE.MC | Olimpo Real Estate SOCIMI SA | 0.88 | -0.06 | -0.03 |
| Low | High | |
| Unlevered beta | 0.05 | 0.16 |
| Relevered beta | 0.1 | 0.34 |
| Adjusted relevered beta | 0.4 | 0.56 |
HMSO.L'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 HMSO.L:
cost_of_equity (7.65%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.4) + 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.