HILTON.NS WACC - Weighted Average Cost of Capital

The WACC of Hilton Metal Forging Ltd (HILTON.NS) is 15.0%.

The Cost of Equity of Hilton Metal Forging Ltd (HILTON.NS) is 16.35%.

The Cost of Debt of Hilton Metal Forging Ltd (HILTON.NS) is 12.55%.

	Range	Selected
Cost of equity	14.30% - 18.40%	16.35%
Tax rate	16.00% - 16.70%	16.35%
Cost of debt	9.70% - 15.40%	12.55%
WACC	12.9% - 17.1%	15.0%

WACC

HILTON.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.9	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.30%	18.40%

Tax rate	16.00%	16.70%
Debt/Equity ratio	0.29	0.29
Cost of debt	9.70%	15.40%

After-tax WACC	12.9%	17.1%


Selected WACC	15.0%

HILTON.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 HILTON.NS:

cost_of_equity (16.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.9) + 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.