514428.BO WACC - Weighted Average Cost of Capital

The WACC of Hindustan Adhesives Ltd (514428.BO) is 11.3%.

The Cost of Equity of Hindustan Adhesives Ltd (514428.BO) is 13.45%.

The Cost of Debt of Hindustan Adhesives Ltd (514428.BO) is 7.70%.

	Range	Selected
Cost of equity	12.20% - 14.70%	13.45%
Tax rate	21.60% - 27.30%	24.45%
Cost of debt	7.30% - 8.10%	7.70%
WACC	10.4% - 12.3%	11.3%

WACC

514428.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.64	0.73

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.20%	14.70%

Tax rate	21.60%	27.30%
Debt/Equity ratio	0.38	0.38
Cost of debt	7.30%	8.10%

After-tax WACC	10.4%	12.3%


Selected WACC	11.3%

514428.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 514428.BO:

cost_of_equity (13.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.64) + 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.