HUBB
Hubbell Inc
Price:  
355.91 
USD
Volume:  
1,047,052.00
United States | Electrical Equipment
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HUBB WACC - Weighted Average Cost of Capital

The WACC of Hubbell Inc (HUBB) is 9.1%.

The Cost of Equity of Hubbell Inc (HUBB) is 9.60%.
The Cost of Debt of Hubbell Inc (HUBB) is 4.25%.

Range Selected
Cost of equity 8.40% - 10.80% 9.60%
Tax rate 21.30% - 21.60% 21.45%
Cost of debt 4.00% - 4.50% 4.25%
WACC 8.0% - 10.3% 9.1%
WACC

HUBB WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.99 1.06
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.40% 10.80%
Tax rate 21.30% 21.60%
Debt/Equity ratio 0.08 0.08
Cost of debt 4.00% 4.50%
After-tax WACC 8.0% 10.3%
Selected WACC 9.1%

HUBB'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 HUBB:

cost_of_equity (9.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.99) + 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.