GICHSGFIN.NS WACC - Weighted Average Cost of Capital

The WACC of GIC Housing Finance Ltd (GICHSGFIN.NS) is 13.2%.

The Cost of Equity of GIC Housing Finance Ltd (GICHSGFIN.NS) is 19.60%.

The Cost of Debt of GIC Housing Finance Ltd (GICHSGFIN.NS) is 16.90%.

	Range	Selected
Cost of equity	15.70% - 23.50%	19.60%
Tax rate	25.40% - 26.10%	25.75%
Cost of debt	6.90% - 26.90%	16.90%
WACC	6.2% - 20.2%	13.2%

WACC

GICHSGFIN.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.06	1.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.70%	23.50%

Tax rate	25.40%	26.10%
Debt/Equity ratio	9.19	9.19
Cost of debt	6.90%	26.90%

After-tax WACC	6.2%	20.2%


Selected WACC	13.2%

GICHSGFIN.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 GICHSGFIN.NS:

cost_of_equity (19.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.06) + 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.