HZN
Horizon Global Corp
Price:  
1.76 
USD
Volume:  
104,369.00
United States | Auto Components
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HZN WACC - Weighted Average Cost of Capital

The WACC of Horizon Global Corp (HZN) is 7.0%.

The Cost of Equity of Horizon Global Corp (HZN) is 11.45%.
The Cost of Debt of Horizon Global Corp (HZN) is 6.55%.

Range Selected
Cost of equity 5.50% - 17.40% 11.45%
Tax rate 4.60% - 6.60% 5.60%
Cost of debt 6.10% - 7.00% 6.55%
WACC 5.8% - 8.2% 7.0%
WACC

HZN WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.35 2.25
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.50% 17.40%
Tax rate 4.60% 6.60%
Debt/Equity ratio 5.62 5.62
Cost of debt 6.10% 7.00%
After-tax WACC 5.8% 8.2%
Selected WACC 7.0%

HZN'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 HZN:

cost_of_equity (11.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.35) + 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.