HOFT
Hooker Furniture Corp
Price:  
10.58 
USD
Volume:  
194,667.00
United States | Household Durables
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HOFT WACC - Weighted Average Cost of Capital

The WACC of Hooker Furniture Corp (HOFT) is 9.2%.

The Cost of Equity of Hooker Furniture Corp (HOFT) is 9.80%.
The Cost of Debt of Hooker Furniture Corp (HOFT) is 7.00%.

Range Selected
Cost of equity 8.50% - 11.10% 9.80%
Tax rate 23.30% - 25.50% 24.40%
Cost of debt 7.00% - 7.00% 7.00%
WACC 8.1% - 10.2% 9.2%
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 1.01 1.12
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.50% 11.10%
Tax rate 23.30% 25.50%
Debt/Equity ratio 0.17 0.17
Cost of debt 7.00% 7.00%
After-tax WACC 8.1% 10.2%
Selected WACC 9.2%

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 (9.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.01) + 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.