HUBG
Hub Group Inc
Price:  
32.88 
USD
Volume:  
491,575.00
United States | Air Freight & Logistics
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HUBG WACC - Weighted Average Cost of Capital

The WACC of Hub Group Inc (HUBG) is 7.3%.

The Cost of Equity of Hub Group Inc (HUBG) is 7.80%.
The Cost of Debt of Hub Group Inc (HUBG) is 4.30%.

Range Selected
Cost of equity 6.40% - 9.20% 7.80%
Tax rate 22.70% - 23.60% 23.15%
Cost of debt 4.00% - 4.60% 4.30%
WACC 6.1% - 8.5% 7.3%
WACC

HUBG WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.56 0.77
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.40% 9.20%
Tax rate 22.70% 23.60%
Debt/Equity ratio 0.13 0.13
Cost of debt 4.00% 4.60%
After-tax WACC 6.1% 8.5%
Selected WACC 7.3%

HUBG'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 HUBG:

cost_of_equity (7.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.56) + 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.