526931.BO WACC - Weighted Average Cost of Capital

The WACC of Hariyana Ship Breakers Ltd (526931.BO) is 15.5%.

The Cost of Equity of Hariyana Ship Breakers Ltd (526931.BO) is 12.25%.

The Cost of Debt of Hariyana Ship Breakers Ltd (526931.BO) is 46.65%.

	Range	Selected
Cost of equity	10.30% - 14.20%	12.25%
Tax rate	28.80% - 31.20%	30.00%
Cost of debt	10.50% - 82.80%	46.65%
WACC	9.8% - 21.1%	15.5%

WACC

526931.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.41	0.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.30%	14.20%

Tax rate	28.80%	31.20%
Debt/Equity ratio	0.19	0.19
Cost of debt	10.50%	82.80%

After-tax WACC	9.8%	21.1%


Selected WACC	15.5%

526931.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 526931.BO:

cost_of_equity (12.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.41) + 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.