HRC
Hill-Rom Holdings Inc
Price:  
155.96 
USD
Volume:  
537,337.00
United States | Health Care Equipment & Supplies
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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%.

Range Selected
Cost of equity 7.40% - 9.70% 8.55%
Tax rate 17.90% - 21.80% 19.85%
Cost of debt 4.00% - 4.50% 4.25%
WACC 6.7% - 8.7% 7.7%
WACC

HRC WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 4.2% 5.2%
Adjusted beta 1.01 1.06
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.40% 9.70%
Tax rate 17.90% 21.80%
Debt/Equity ratio 0.2 0.2
Cost of debt 4.00% 4.50%
After-tax WACC 6.7% 8.7%
Selected WACC 7.7%

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.