HCC.NS WACC - Weighted Average Cost of Capital

The WACC of Hindustan Construction Company Ltd (HCC.NS) is 16.3%.

The Cost of Equity of Hindustan Construction Company Ltd (HCC.NS) is 19.75%.

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

	Range	Selected
Cost of equity	17.50% - 22.00%	19.75%
Tax rate	31.00% - 41.50%	36.25%
Cost of debt	12.10% - 12.30%	12.20%
WACC	14.9% - 17.7%	16.3%

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	1.28	1.51

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.50%	22.00%

Tax rate	31.00%	41.50%
Debt/Equity ratio	0.4	0.4
Cost of debt	12.10%	12.30%

After-tax WACC	14.9%	17.7%


Selected WACC	16.3%

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 (19.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.28) + 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.