Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Hedge Realty Development Fundo Investimento Imobiliario FII's weighted average cost of capital is 2%%. Hedge Realty Development Fundo Investimento Imobiliario FII's ROIC % is 0.00% (calculated using TTM income statement data).
Hedge Realty Development Fundo Investimento Imobiliario FII earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year annual average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest annual Interest Expense divided by the latest one-year annual average debt to get the simplified cost of debt.
Related Terms
Hedge Realty Development Fundo Investimento Imobiliario FII WACC % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Hedge Realty Development Fundo Investimento Imobiliario FII WACC % Chart
Hedge Realty Development Fundo Investimento Imobiliario FII Annual Data
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Hedge Realty Development Fundo Investimento Imobiliario FII WACC % vs REITs Industry
Hedge Realty Development Fundo Investimento Imobiliario FII WACC % Calculation
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Hedge Realty Development Fundo Investimento Imobiliario FII's market capitalization (E) is R$7.739 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year annual average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Dec. 2025, Hedge Realty Development Fundo Investimento Imobiliario FII's latest one-year annual average Book Value of Debt (D) is R$0 Mil.
a) weight of equity = E / (E + D) = 7.739 / (7.739 + 0) = 1
b) weight of debt = D / (E + D) = 0 / (7.739 + 0) = 0
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.372%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Hedge Realty Development Fundo Investimento Imobiliario FII's beta is -0.3948.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.372% + -0.3948 * 6% = 2.0032%
3. Cost of Debt:
GuruFocus uses latest annual Interest Expense divided by the latest one-year annual average debt to get the simplified cost of debt.
As of Dec. 2025, Hedge Realty Development Fundo Investimento Imobiliario FII's interest expense (positive number) was R$-0 Mil. Its total Book Value of Debt (D) is R$0 Mil.
Cost of Debt = -0 / 0 = %.
4. Multiply by one minus annual Tax Rate:
GuruFocus uses the most recent annual Tax Expense divided by the most recent annual Pre-Tax Income to calculate the tax rate. The calculated annual tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated annual Tax Rate = 0 / 1.486 = 0%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Hedge Realty Development Fundo Investimento Imobiliario FII (BSP:HRDF11) has a WACC % of 2% as of Jun. 29, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Hedge Realty Development Fundo Investimento Imobiliario FII and its competitors. This is 64% below median its historical median of 5.61. Over the past decade, Hedge Realty Development Fundo Investimento Imobiliario FII's WACC % has ranged from 2.01 to 7.52. According to the industry distribution chart, Hedge Realty Development Fundo Investimento Imobiliario FII ranks #35 out of 972 companies in the REITs industry, placing it in the top 3.6%.
Is Hedge Realty Development Fundo Investimento Imobiliario FII's WACC % too high?
Hedge Realty Development Fundo Investimento Imobiliario FII's current WACC % of 2% is 64% below median its 10-year median of 5.61. Over the past 10 years, this metric has ranged from a low of 2.01 to a high of 7.52. The REITs industry median WACC % is 6.57. Hedge Realty Development Fundo Investimento Imobiliario FII's value of 2% is 69.5% below this industry median. Based on the distribution chart, Hedge Realty Development Fundo Investimento Imobiliario FII ranks #35 out of 972 companies in the REITs industry, which is in the top quartile — a strong position relative to peers. Overall, Hedge Realty Development Fundo Investimento Imobiliario FII has a GF Score™ of 19/100, reflecting its overall financial health beyond just this single metric.
How does Hedge Realty Development Fundo Investimento Imobiliario FII's WACC % compare to VICI and WPC?
According to the REITs industry distribution chart, Hedge Realty Development Fundo Investimento Imobiliario FII ranks #35 out of 972 companies for WACC %. This places Hedge Realty Development Fundo Investimento Imobiliario FII in the top 4% of its industry — outperforming the majority of peers. The industry median WACC % is 6.57. Hedge Realty Development Fundo Investimento Imobiliario FII's value of 2% is 69.5% below this benchmark. Historically, Hedge Realty Development Fundo Investimento Imobiliario FII's own WACC % has ranged from 2.01 to 7.52 over the past decade. While the company's 10-year median is 5.61 vs. the industry median of 6.57, Hedge Realty Development Fundo Investimento Imobiliario FII has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for a REITs company?
The median WACC % among REITs companies is 6.57, based on 972 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Hedge Realty Development Fundo Investimento Imobiliario FII's current WACC % of 2% is 69.5% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Hedge Realty Development Fundo Investimento Imobiliario FII and its competitors. For the REITs industry, the median WACC % is 6.57 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Hedge Realty Development Fundo Investimento Imobiliario FII's current WACC % is 2%, which is 64% below median its own 10-year median of 5.61. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Hedge Realty Development Fundo Investimento Imobiliario FII stock overvalued right now?
Hedge Realty Development Fundo Investimento Imobiliario FII (BSP:HRDF11) has a current WACC % of 2%. The current WACC % is 2%, which is 64% below median its 10-year median of 5.61 and 69.5% below the REITs industry median of 6.57. Hedge Realty Development Fundo Investimento Imobiliario FII's overall GF Score™ is 19/100. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For Hedge Realty Development Fundo Investimento Imobiliario FII (BSP:HRDF11), the current WACC % is 2% as of Jun. 29, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Hedge Realty Development Fundo Investimento Imobiliario FII Business Description
Hedge Realty Development Fundo Investimento Imobiliario FII is a closed-end fund. The Fund's objective is to provide its shareholders with long-term appreciation and profitability of their shares, predominantly through investment.
19GF Score
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