508664.BO WACC - Weighted Average Cost of Capital
The WACC of Best Eastern Hotels Ltd (508664.BO) is 11.4%.
| Range | Selected | |
| Cost of equity | 10.6% - 12.5% | 11.55% |
| Tax rate | 10.4% - 18.3% | 14.35% |
| Cost of debt | 5.2% - 18.6% | 11.9% |
| WACC | 10.1% - 12.8% | 11.4% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.45 | 0.5 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.6% | 12.5% |
| Tax rate | 10.4% | 18.3% |
| Debt/Equity ratio | 0.11 | 0.11 |
| Cost of debt | 5.2% | 18.6% |
| After-tax WACC | 10.1% | 12.8% |
| Selected WACC | 11.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 508664.BO | Best Eastern Hotels Ltd | 0.11 | 0.29 | 0.27 |
| 509546.BO | Graviss Hospitality Ltd | 0.01 | 0.22 | 0.22 |
| 526373.BO | Cindrella Hotels Ltd | 0.09 | 0.85 | 0.79 |
| 526755.BO | Velan Hotels Ltd | 2.58 | 0.54 | 0.17 |
| 526761.BO | Howard Hotels Ltd | 0.22 | 0.2 | 0.17 |
| 532124.BO | Reliable Ventures India Ltd | 0.03 | 0.49 | 0.48 |
| 532992.BO | CHL Ltd | 1.56 | 0.38 | 0.16 |
| AHLEAST.NS | Asian Hotels East Ltd | 1.4 | 0.56 | 0.25 |
| BLUECOAST.NS | Blue Coast Hotels Ltd | 1.1 | -0.42 | -0.21 |
| VICEROY.NS | Viceroy Hotels Ltd | 0.36 | -0.21 | -0.16 |
| Low | High | |
| Unlevered beta | 0.17 | 0.23 |
| Relevered beta | 0.18 | 0.25 |
| Adjusted relevered beta | 0.45 | 0.5 |
508664.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 508664.BO:
cost_of_equity (11.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.45) + 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.