HEROMOTOCO.NS
Hero MotoCorp Ltd
Price:  
4,309.30 
INR
Volume:  
914,311.00
India | Automobiles
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

HEROMOTOCO.NS WACC - Weighted Average Cost of Capital

The WACC of Hero MotoCorp Ltd (HEROMOTOCO.NS) is 15.5%.

The Cost of Equity of Hero MotoCorp Ltd (HEROMOTOCO.NS) is 15.60%.
The Cost of Debt of Hero MotoCorp Ltd (HEROMOTOCO.NS) is 10.20%.

Range Selected
Cost of equity 13.20% - 18.00% 15.60%
Tax rate 25.30% - 26.30% 25.80%
Cost of debt 7.50% - 12.90% 10.20%
WACC 13.2% - 17.9% 15.5%
WACC

HEROMOTOCO.NS WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.77 1.09
Additional risk adjustments 0.0% 0.5%
Cost of equity 13.20% 18.00%
Tax rate 25.30% 26.30%
Debt/Equity ratio 0.01 0.01
Cost of debt 7.50% 12.90%
After-tax WACC 13.2% 17.9%
Selected WACC 15.5%

HEROMOTOCO.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 HEROMOTOCO.NS:

cost_of_equity (15.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.77) + 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.