AHLWEST.NS
Asian Hotels (West) Ltd
Price:  
144 
INR
Volume:  
630
India | Hotels, Restaurants & Leisure

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%.

RangeSelected
Cost of equity38.8% - 52.9%45.85%
Tax rate10.9% - 46.0%28.45%
Cost of debt8.6% - 9.1%8.85%
WACC12.1% - 11.8%12.0%
WACC

AHLWEST.NS WACC calculation

CategoryLowHigh
Long-term bond rate6.9%7.4%
Equity market risk premium8.3%9.3%
Adjusted beta3.844.84
Additional risk adjustments0.0%0.5%
Cost of equity38.8%52.9%
Tax rate10.9%46.0%
Debt/Equity ratio
5.965.96
Cost of debt8.6%9.1%
After-tax WACC12.1%11.8%
Selected WACC12.0%

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.