HCL-INSYS.NS WACC - Weighted Average Cost of Capital

The WACC of HCL Infosystems Ltd (HCL-INSYS.NS) is 10.2%.

The Cost of Equity of HCL Infosystems Ltd (HCL-INSYS.NS) is 14.50%.

The Cost of Debt of HCL Infosystems Ltd (HCL-INSYS.NS) is 5.50%.

	Range	Selected
Cost of equity	11.50% - 17.50%	14.50%
Tax rate	0.30% - 0.60%	0.45%
Cost of debt	4.00% - 7.00%	5.50%
WACC	7.9% - 12.4%	10.2%

WACC

HCL-INSYS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.56	1.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	17.50%

Tax rate	0.30%	0.60%
Debt/Equity ratio	0.93	0.93
Cost of debt	4.00%	7.00%

After-tax WACC	7.9%	12.4%


Selected WACC	10.2%

HCL-INSYS.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 HCL-INSYS.NS:

cost_of_equity (14.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.56) + 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.