HTSC WACC - Weighted Average Cost of Capital
The WACC of Here To Serve Holding Corp (HTSC) is 7.7%.
| Range | Selected | |
| Cost of equity | 6.8% - 9.2% | 8% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 6.5% - 8.9% | 7.7% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.57 | 0.72 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.8% | 9.2% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.09 | 0.09 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 6.5% | 8.9% |
| Selected WACC | 7.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| HTSC | Here To Serve Holding Corp | 0.09 | 0.9 | 0.85 |
| AOXY | Advanced Oxygen Technologies Inc | 0.43 | 1.84 | 1.4 |
| BRRE | Blue Ridge Real Estate Co | 0 | 0.19 | 0.19 |
| CMU.V | Comet Industries Ltd | 0.98 | -0.29 | -0.17 |
| GUF.V | Gulf & Pacific Equities Corp | 2.59 | 0.04 | 0.01 |
| TURV | Two Rivers Water & Farming Co | 62.58 | 1.03 | 0.02 |
| VCOM.V | Vivere Communities Inc | 2.31 | 1.06 | 0.4 |
| YAK.V | Mongolia Growth Group Ltd | 1.08 | 0.88 | 0.49 |
| ZDPY | Zoned Properties Inc | 1.87 | 0.45 | 0.19 |
| Low | High | |
| Unlevered beta | 0.19 | 0.36 |
| Relevered beta | 0.36 | 0.58 |
| Adjusted relevered beta | 0.57 | 0.72 |
HTSC'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 HTSC:
cost_of_equity (8.00%) = risk_free_rate (4.45%) + equity_risk_premium (5.10%) * adjusted_beta (0.57) + 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.