HRON.TA WACC - Weighted Average Cost of Capital

The WACC of Hiron Trade Investments & Industrial Buildings Ltd (HRON.TA) is 8.3%.

The Cost of Equity of Hiron Trade Investments & Industrial Buildings Ltd (HRON.TA) is 8.45%.

The Cost of Debt of Hiron Trade Investments & Industrial Buildings Ltd (HRON.TA) is 5.00%.

	Range	Selected
Cost of equity	7.60% - 9.30%	8.45%
Tax rate	22.10% - 22.40%	22.25%
Cost of debt	5.00% - 5.00%	5.00%
WACC	7.5% - 9.1%	8.3%

WACC

HRON.TA WACC calculation

Category	Low	High

Long-term bond rate	4.8%	5.3%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.45	0.49

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.60%	9.30%

Tax rate	22.10%	22.40%
Debt/Equity ratio	0.04	0.04
Cost of debt	5.00%	5.00%

After-tax WACC	7.5%	9.1%


Selected WACC	8.3%

HRON.TA'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 HRON.TA:

cost_of_equity (8.45%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (0.45) + 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.