HRB WACC - Weighted Average Cost of Capital
The WACC of H & R Block Inc (HRB) is 8.2%.
| Range | Selected | |
| Cost of equity | 7.8% - 10.4% | 9.1% |
| Tax rate | 18.6% - 21.2% | 19.9% |
| Cost of debt | 4.0% - 4.6% | 4.3% |
| WACC | 7.1% - 9.3% | 8.2% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.87 | 0.99 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.8% | 10.4% |
| Tax rate | 18.6% | 21.2% |
| Debt/Equity ratio | 0.2 | 0.2 |
| Cost of debt | 4.0% | 4.6% |
| After-tax WACC | 7.1% | 9.3% |
| Selected WACC | 8.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| HRB | H & R Block Inc | 0.2 | 0.12 | 0.1 |
| FRG | Franchise Group Inc | 1.74 | 1.95 | 0.82 |
| OSW | OneSpaWorld Holdings Ltd | 0.05 | 1.17 | 1.13 |
| SIC | Select Interior Concepts Inc | 0.45 | 0.94 | 0.7 |
| STN.TO | Stantec Inc | 0.12 | 0.99 | 0.91 |
| TMX | Terminix Global Holdings Inc | 0.2 | 0.78 | 0.67 |
| VVNT | Vivint Smart Home Inc | 1.05 | 0.85 | 0.46 |
| XX.V | Avante Logixx Inc | 0.06 | 1.52 | 1.44 |
| YGTYF | SSLJ.com Ltd | 97.18 | 0 | 0 |
| AUX.WA | Auxilia SA | 0.12 | 1.69 | 1.55 |
| Low | High | |
| Unlevered beta | 0.69 | 0.85 |
| Relevered beta | 0.81 | 0.99 |
| Adjusted relevered beta | 0.87 | 0.99 |
HRB'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 HRB:
cost_of_equity (9.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.87) + 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.