HRC
Hill-Rom Holdings Inc
Price:  
155.96 
USD
Volume:  
537,337
United States | Health Care Equipment & Supplies

HRC WACC - Weighted Average Cost of Capital

The WACC of Hill-Rom Holdings Inc (HRC) is 7.7%.

The Cost of Equity of Hill-Rom Holdings Inc (HRC) is 8.55%.
The Cost of Debt of Hill-Rom Holdings Inc (HRC) is 4.25%.

RangeSelected
Cost of equity7.4% - 9.7%8.55%
Tax rate17.9% - 21.8%19.85%
Cost of debt4.0% - 4.5%4.25%
WACC6.7% - 8.7%7.7%
WACC

HRC WACC calculation

CategoryLowHigh
Long-term bond rate3.2%3.7%
Equity market risk premium4.2%5.2%
Adjusted beta1.011.06
Additional risk adjustments0.0%0.5%
Cost of equity7.4%9.7%
Tax rate17.9%21.8%
Debt/Equity ratio
0.20.2
Cost of debt4.0%4.5%
After-tax WACC6.7%8.7%
Selected WACC7.7%

HRC'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 HRC:

cost_of_equity (8.55%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (1.01) + 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.