HR.UN.TO WACC - Weighted Average Cost of Capital

The WACC of H&R Real Estate Investment Trust (HR.UN.TO) is 6.8%.

The Cost of Equity of H&R Real Estate Investment Trust (HR.UN.TO) is 10.25%.

The Cost of Debt of H&R Real Estate Investment Trust (HR.UN.TO) is 5.30%.

	Range	Selected
Cost of equity	9.10% - 11.40%	10.25%
Tax rate	15.50% - 24.50%	20.00%
Cost of debt	4.30% - 6.30%	5.30%
WACC	5.9% - 7.6%	6.8%

WACC

HR.UN.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.16	1.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.10%	11.40%

Tax rate	15.50%	24.50%
Debt/Equity ratio	1.33	1.33
Cost of debt	4.30%	6.30%

After-tax WACC	5.9%	7.6%


Selected WACC	6.8%

HR.UN.TO'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 HR.UN.TO:

cost_of_equity (10.25%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.16) + 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.