The WACC of Himachal Fibres Ltd (514010.BO) is 10.5%.
Range | Selected | |
Cost of equity | 9.6% - 11.5% | 10.55% |
Tax rate | 3.9% - 8.9% | 6.4% |
Cost of debt | 7.0% - 11.6% | 9.3% |
WACC | 9.5% - 11.5% | 10.5% |
Category | Low | High |
Long-term bond rate | 6.9% | 7.4% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 0.32 | 0.39 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 9.6% | 11.5% |
Tax rate | 3.9% | 8.9% |
Debt/Equity ratio | 0.04 | 0.04 |
Cost of debt | 7.0% | 11.6% |
After-tax WACC | 9.5% | 11.5% |
Selected WACC | 10.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
514010.BO | Himachal Fibres Ltd | 0.04 | 0.72 | 0.69 |
500192.BO | Prag Bosimi Synthetics Ltd | 8.36 | 0.67 | 0.07 |
514140.BO | Suryavanshi Spinning Mills Ltd | 1.47 | 0.29 | 0.12 |
514266.BO | Zenith Fibres Ltd | 0.01 | 0.79 | 0.78 |
521242.BO | Kandagiri Spinning Millis Ltd | 1.16 | -0.52 | -0.25 |
526851.BO | Arex Industries Ltd | 0.18 | 0.45 | 0.39 |
531411.BO | Tuni Textile Mills Ltd | 0.68 | -0.03 | -0.02 |
531744.BO | Gini Silk Mills Ltd | 0.17 | -0.13 | -0.11 |
EUROTEXIND.NS | Eurotex Industries and Exports Ltd | 3.24 | -1.29 | -0.32 |
Low | High | |
Unlevered beta | 0 | 0.11 |
Relevered beta | -0.01 | 0.09 |
Adjusted relevered beta | 0.32 | 0.39 |
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.