HUM.L WACC - Weighted Average Cost of Capital

The WACC of Hummingbird Resources PLC (HUM.L) is 7.5%.

The Cost of Equity of Hummingbird Resources PLC (HUM.L) is 9.95%.

The Cost of Debt of Hummingbird Resources PLC (HUM.L) is 7.85%.

	Range	Selected
Cost of equity	8.20% - 11.70%	9.95%
Tax rate	10.60% - 13.40%	12.00%
Cost of debt	7.00% - 8.70%	7.85%
WACC	6.6% - 8.4%	7.5%

WACC

HUM.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.7	0.96

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.20%	11.70%

Tax rate	10.60%	13.40%
Debt/Equity ratio	3.92	3.92
Cost of debt	7.00%	8.70%

After-tax WACC	6.6%	8.4%


Selected WACC	7.5%

HUM.L'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 HUM.L:

cost_of_equity (9.95%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.7) + 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.