The WACC of Asian Hotels (West) Ltd (AHLWEST.NS) is 12.0%.
Range | Selected | |
Cost of equity | 38.8% - 52.9% | 45.85% |
Tax rate | 10.9% - 46.0% | 28.45% |
Cost of debt | 8.6% - 9.1% | 8.85% |
WACC | 12.1% - 11.8% | 12.0% |
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 | 38.8% | 52.9% |
Tax rate | 10.9% | 46.0% |
Debt/Equity ratio | 5.96 | 5.96 |
Cost of debt | 8.6% | 9.1% |
After-tax WACC | 12.1% | 11.8% |
Selected WACC | 12.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
AHLWEST.NS | Asian Hotels (West) Ltd | 5.96 | 0 | 0 |
523710.BO | Sayaji Hotels Ltd | 0.29 | 0.54 | 0.44 |
AHLEAST.NS | Asian Hotels East Ltd | 1.16 | 0.49 | 0.25 |
ASIANHOTNR.NS | Asian Hotels (North) Ltd | 0.77 | 0.49 | 0.3 |
BYKE.NS | Byke Hospitality Ltd | 0.22 | 1.4 | 1.19 |
EIHAHOTELS.NS | EIH Associated Hotels Ltd | 0 | 0.87 | 0.87 |
HLVLTD.NS | HLV Ltd | 0.05 | 1.14 | 1.1 |
KAMATHOTEL.NS | Kamat Hotels (India) Ltd | 0.38 | 1.17 | 0.89 |
ORIENTHOT.NS | Oriental Hotels Ltd | 0.06 | 2.02 | 1.92 |
ROHLTD.NS | Royal Orchid Hotels Ltd | 0.18 | 1.4 | 1.22 |
TAJGVK.NS | TAJ GVK Hotels and Resorts Ltd | 0.04 | 1.69 | 1.64 |
Low | High | |
Unlevered beta | 0.87 | 1.1 |
Relevered beta | 5.24 | 6.73 |
Adjusted relevered beta | 3.84 | 4.84 |
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.