HPS.WA WACC - Weighted Average Cost of Capital

The WACC of Hydrapres SA (HPS.WA) is 8.9%.

The Cost of Equity of Hydrapres SA (HPS.WA) is 8.90%.

The Cost of Debt of Hydrapres SA (HPS.WA) is 9.10%.

	Range	Selected
Cost of equity	7.90% - 9.90%	8.90%
Tax rate	0.60% - 1.20%	0.90%
Cost of debt	7.00% - 11.20%	9.10%
WACC	7.5% - 10.3%	8.9%

WACC

HPS.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.37	0.46

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	9.90%

Tax rate	0.60%	1.20%
Debt/Equity ratio	0.55	0.55
Cost of debt	7.00%	11.20%

After-tax WACC	7.5%	10.3%


Selected WACC	8.9%

HPS.WA'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 HPS.WA:

cost_of_equity (8.90%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.37) + 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.