514010.BO
Himachal Fibres Ltd
Price:  
53.76 
INR
Volume:  
320,883
India | Textiles, Apparel & Luxury Goods

514010.BO WACC - Weighted Average Cost of Capital

The WACC of Himachal Fibres Ltd (514010.BO) is 10.5%.

The Cost of Equity of Himachal Fibres Ltd (514010.BO) is 10.55%.
The Cost of Debt of Himachal Fibres Ltd (514010.BO) is 9.3%.

RangeSelected
Cost of equity9.6% - 11.5%10.55%
Tax rate3.9% - 8.9%6.4%
Cost of debt7.0% - 11.6%9.3%
WACC9.5% - 11.5%10.5%
WACC

514010.BO WACC calculation

CategoryLowHigh
Long-term bond rate6.9%7.4%
Equity market risk premium8.3%9.3%
Adjusted beta0.320.39
Additional risk adjustments0.0%0.5%
Cost of equity9.6%11.5%
Tax rate3.9%8.9%
Debt/Equity ratio
0.040.04
Cost of debt7.0%11.6%
After-tax WACC9.5%11.5%
Selected WACC10.5%

514010.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 514010.BO:

cost_of_equity (10.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.32) + 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.