HINDOILEXP.NS WACC - Weighted Average Cost of Capital

The WACC of Hindustan Oil Exploration Company Ltd (HINDOILEXP.NS) is 11.6%.

The Cost of Equity of Hindustan Oil Exploration Company Ltd (HINDOILEXP.NS) is 11.85%.

The Cost of Debt of Hindustan Oil Exploration Company Ltd (HINDOILEXP.NS) is 7.45%.

	Range	Selected
Cost of equity	10.70% - 13.00%	11.85%
Tax rate	1.80% - 2.30%	2.05%
Cost of debt	6.80% - 8.10%	7.45%
WACC	10.5% - 12.8%	11.6%

WACC

HINDOILEXP.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.46	0.55

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.70%	13.00%

Tax rate	1.80%	2.30%
Debt/Equity ratio	0.05	0.05
Cost of debt	6.80%	8.10%

After-tax WACC	10.5%	12.8%


Selected WACC	11.6%

HINDOILEXP.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 HINDOILEXP.NS:

cost_of_equity (11.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.46) + 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.