HBSL.NS WACC - Weighted Average Cost of Capital

The WACC of HB Stockholdings Ltd (HBSL.NS) is 14.8%.

The Cost of Equity of HB Stockholdings Ltd (HBSL.NS) is 13.85%.

The Cost of Debt of HB Stockholdings Ltd (HBSL.NS) is 17.95%.

	Range	Selected
Cost of equity	12.60% - 15.10%	13.85%
Tax rate	4.20% - 6.40%	5.30%
Cost of debt	7.00% - 28.90%	17.95%
WACC	10.8% - 18.7%	14.8%

WACC

HBSL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.69	0.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.60%	15.10%

Tax rate	4.20%	6.40%
Debt/Equity ratio	0.43	0.43
Cost of debt	7.00%	28.90%

After-tax WACC	10.8%	18.7%


Selected WACC	14.8%

HBSL.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 HBSL.NS:

cost_of_equity (13.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.69) + 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.