HOFT
Hooker Furniture Corp
Price:  
9.95 
USD
Volume:  
221,878.00
United States | Household Durables
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

HOFT WACC - Weighted Average Cost of Capital

The WACC of Hooker Furniture Corp (HOFT) is 9.1%.

The Cost of Equity of Hooker Furniture Corp (HOFT) is 9.90%.
The Cost of Debt of Hooker Furniture Corp (HOFT) is 7.00%.

Range Selected
Cost of equity 8.60% - 11.20% 9.90%
Tax rate 23.30% - 25.50% 24.40%
Cost of debt 7.00% - 7.00% 7.00%
WACC 8.0% - 10.2% 9.1%
WACC

HOFT WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.03 1.14
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.60% 11.20%
Tax rate 23.30% 25.50%
Debt/Equity ratio 0.2 0.2
Cost of debt 7.00% 7.00%
After-tax WACC 8.0% 10.2%
Selected WACC 9.1%

HOFT'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 HOFT:

cost_of_equity (9.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.03) + 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.