HWH.AX WACC - Weighted Average Cost of Capital
The WACC of Houston We Have Ltd (HWH.AX) is 7.6%.
| Range | Selected | |
| Cost of equity | 10.5% - 13.5% | 12% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 4.4% - 4.5% | 4.45% |
| WACC | 6.8% - 8.3% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 3.7% | 4.2% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 1.45 | 1.53 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.5% | 13.5% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 4.4% | 4.5% |
| After-tax WACC | 6.8% | 8.3% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| HWH.AX | Houston We Have Ltd | 0.92 | 1 | 0.61 |
| CAG.AX | Cape Range Ltd | 0 | -0.87 | -0.87 |
| ICE.AX | Icetana Ltd | 0.01 | -0.46 | -0.45 |
| KNO.AX | Knosys Ltd | 0.03 | -0.51 | -0.5 |
| LVE.AX | Love Group Global Ltd | 1.17 | 0.64 | 0.35 |
| NOR.AX | Norwood Systems Ltd | 0.07 | -0.77 | -0.73 |
| OLL.AX | Openlearning Ltd | 0.33 | -0.69 | -0.56 |
| OOK.AX | Ookami Ltd | 1.13 | 3.55 | 1.98 |
| PTG.AX | Proptech Group Ltd | 0.01 | 1.46 | 1.45 |
| RD1.AX | Registry Direct Ltd | 0.87 | 1.06 | 0.66 |
| XPE.AX | XPED Ltd | 0.03 | 0.07 | 0.07 |
| Low | High | |
| Unlevered beta | -0.45 | 0.35 |
| Relevered beta | 1.67 | 1.79 |
| Adjusted relevered beta | 1.45 | 1.53 |
HWH.AX'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 HWH.AX:
cost_of_equity (12.00%) = risk_free_rate (3.95%) + equity_risk_premium (5.20%) * adjusted_beta (1.45) + 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.