APOLLOHOSP.NS WACC - Weighted Average Cost of Capital

The WACC of Apollo Hospitals Enterprise Ltd (APOLLOHOSP.NS) is 12.3%.

The Cost of Equity of Apollo Hospitals Enterprise Ltd (APOLLOHOSP.NS) is 12.65%.

The Cost of Debt of Apollo Hospitals Enterprise Ltd (APOLLOHOSP.NS) is 7.30%.

	Range	Selected
Cost of equity	11.40% - 13.90%	12.65%
Tax rate	28.80% - 31.20%	30.00%
Cost of debt	6.80% - 7.80%	7.30%
WACC	11.1% - 13.4%	12.3%

WACC

APOLLOHOSP.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.55	0.64

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.40%	13.90%

Tax rate	28.80%	31.20%
Debt/Equity ratio	0.05	0.05
Cost of debt	6.80%	7.80%

After-tax WACC	11.1%	13.4%


Selected WACC	12.3%

APOLLOHOSP.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 APOLLOHOSP.NS:

cost_of_equity (12.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.55) + 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.