CHALET.NS WACC - Weighted Average Cost of Capital

The WACC of Chalet Hotels Ltd (CHALET.NS) is 13.1%.

The Cost of Equity of Chalet Hotels Ltd (CHALET.NS) is 14.55%.

The Cost of Debt of Chalet Hotels Ltd (CHALET.NS) is 6.85%.

	Range	Selected
Cost of equity	11.10% - 18.00%	14.55%
Tax rate	39.90% - 46.40%	43.15%
Cost of debt	5.60% - 8.10%	6.85%
WACC	10.0% - 16.2%	13.1%

WACC

CHALET.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.5	1.09

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.10%	18.00%

Tax rate	39.90%	46.40%
Debt/Equity ratio	0.15	0.15
Cost of debt	5.60%	8.10%

After-tax WACC	10.0%	16.2%


Selected WACC	13.1%

CHALET.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 CHALET.NS:

cost_of_equity (14.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.5) + 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.