505893.BO WACC - Weighted Average Cost of Capital

The WACC of Hindustan Hardy Ltd (505893.BO) is 14.5%.

The Cost of Equity of Hindustan Hardy Ltd (505893.BO) is 14.85%.

The Cost of Debt of Hindustan Hardy Ltd (505893.BO) is 7.10%.

	Range	Selected
Cost of equity	13.60% - 16.10%	14.85%
Tax rate	26.80% - 27.30%	27.05%
Cost of debt	6.70% - 7.50%	7.10%
WACC	13.3% - 15.7%	14.5%

WACC

505893.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.81	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.60%	16.10%

Tax rate	26.80%	27.30%
Debt/Equity ratio	0.03	0.03
Cost of debt	6.70%	7.50%

After-tax WACC	13.3%	15.7%


Selected WACC	14.5%

505893.BO'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 505893.BO:

cost_of_equity (14.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.81) + 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.