HDIL.NS WACC - Weighted Average Cost of Capital

The WACC of Housing Development and Infrastructure Ltd (HDIL.NS) is 13.8%.

The Cost of Equity of Housing Development and Infrastructure Ltd (HDIL.NS) is 29.55%.

The Cost of Debt of Housing Development and Infrastructure Ltd (HDIL.NS) is 16.05%.

	Range	Selected
Cost of equity	19.10% - 40.00%	29.55%
Tax rate	19.10% - 22.30%	20.70%
Cost of debt	13.50% - 18.60%	16.05%
WACC	11.4% - 16.1%	13.8%

WACC

HDIL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.47	3.45

Additional risk adjustments	0.0%	0.5%
Cost of equity	19.10%	40.00%

Tax rate	19.10%	22.30%
Debt/Equity ratio	15	15
Cost of debt	13.50%	18.60%

After-tax WACC	11.4%	16.1%


Selected WACC	13.8%

HDIL.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 HDIL.NS:

cost_of_equity (29.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.47) + 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.