HCC.NS
Hindustan Construction Company Ltd
Price:  
28.83 
INR
Volume:  
5,568,129.00
India | Construction & Engineering
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HCC.NS WACC - Weighted Average Cost of Capital

The WACC of Hindustan Construction Company Ltd (HCC.NS) is 17.1%.

The Cost of Equity of Hindustan Construction Company Ltd (HCC.NS) is 21.10%.
The Cost of Debt of Hindustan Construction Company Ltd (HCC.NS) is 12.20%.

Range Selected
Cost of equity 19.50% - 22.70% 21.10%
Tax rate 31.00% - 41.50% 36.25%
Cost of debt 12.10% - 12.30% 12.20%
WACC 16.2% - 18.1% 17.1%
WACC

HCC.NS WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 1.53 1.59
Additional risk adjustments 0.0% 0.5%
Cost of equity 19.50% 22.70%
Tax rate 31.00% 41.50%
Debt/Equity ratio 0.42 0.42
Cost of debt 12.10% 12.30%
After-tax WACC 16.2% 18.1%
Selected WACC 17.1%

HCC.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 HCC.NS:

cost_of_equity (21.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.53) + 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.