AHLWEST.NS WACC - Weighted Average Cost of Capital

The WACC of Asian Hotels (West) Ltd (AHLWEST.NS) is 12.0%.

The Cost of Equity of Asian Hotels (West) Ltd (AHLWEST.NS) is 45.85%.

The Cost of Debt of Asian Hotels (West) Ltd (AHLWEST.NS) is 8.85%.

	Range	Selected
Cost of equity	38.80% - 52.90%	45.85%
Tax rate	10.90% - 46.00%	28.45%
Cost of debt	8.60% - 9.10%	8.85%
WACC	12.1% - 11.8%	12.0%

WACC

AHLWEST.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	3.84	4.84

Additional risk adjustments	0.0%	0.5%
Cost of equity	38.80%	52.90%

Tax rate	10.90%	46.00%
Debt/Equity ratio	5.96	5.96
Cost of debt	8.60%	9.10%

After-tax WACC	12.1%	11.8%


Selected WACC	12.0%

AHLWEST.NS'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 AHLWEST.NS:

cost_of_equity (45.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (3.84) + 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.