HRB
H & R Block Inc
Price:  
50.35 
USD
Volume:  
2,240,138.00
United States | Diversified Consumer Services
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HRB WACC - Weighted Average Cost of Capital

The WACC of H & R Block Inc (HRB) is 8.0%.

The Cost of Equity of H & R Block Inc (HRB) is 9.00%.
The Cost of Debt of H & R Block Inc (HRB) is 4.65%.

Range Selected
Cost of equity 7.90% - 10.10% 9.00%
Tax rate 21.30% - 21.70% 21.50%
Cost of debt 4.60% - 4.70% 4.65%
WACC 7.1% - 8.9% 8.0%
WACC

HRB WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.87 0.93
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.90% 10.10%
Tax rate 21.30% 21.70%
Debt/Equity ratio 0.22 0.22
Cost of debt 4.60% 4.70%
After-tax WACC 7.1% 8.9%
Selected WACC 8.0%

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 (9.00%) = 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.