HINDCOMPOS.NS WACC - Weighted Average Cost of Capital

The WACC of Hindustan Composites Ltd (HINDCOMPOS.NS) is 16.1%.

The Cost of Equity of Hindustan Composites Ltd (HINDCOMPOS.NS) is 16.15%.

The Cost of Debt of Hindustan Composites Ltd (HINDCOMPOS.NS) is 13.05%.

	Range	Selected
Cost of equity	15.00% - 17.30%	16.15%
Tax rate	16.00% - 17.40%	16.70%
Cost of debt	7.50% - 18.60%	13.05%
WACC	15.0% - 17.3%	16.1%

WACC

HINDCOMPOS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.98	1.01

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.00%	17.30%

Tax rate	16.00%	17.40%
Debt/Equity ratio	0	0
Cost of debt	7.50%	18.60%

After-tax WACC	15.0%	17.3%


Selected WACC	16.1%

HINDCOMPOS.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 HINDCOMPOS.NS:

cost_of_equity (16.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.98) + 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.