HR.UN.TO
H&R Real Estate Investment Trust
Price:  
9.83 
CAD
Volume:  
150,290.00
Canada | Equity Real Estate Investment Trusts (REITs)
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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 10.15%.
The Cost of Debt of H&R Real Estate Investment Trust (HR.UN.TO) is 5.20%.

Range Selected
Cost of equity 8.80% - 11.50% 10.15%
Tax rate 9.60% - 19.70% 14.65%
Cost of debt 4.10% - 6.30% 5.20%
WACC 5.8% - 7.7% 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 1.1 1.2
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.80% 11.50%
Tax rate 9.60% 19.70%
Debt/Equity ratio 1.41 1.41
Cost of debt 4.10% 6.30%
After-tax WACC 5.8% 7.7%
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 (10.15%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.1) + 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.