HINDOILEXP.NS WACC - Weighted Average Cost of Capital
The WACC of Hindustan Oil Exploration Company Ltd (HINDOILEXP.NS) is 11.9%.
| Range | Selected | |
| Cost of equity | 11.1% - 13.4% | 12.25% |
| Tax rate | 1.8% - 2.3% | 2.05% |
| Cost of debt | 6.0% - 7.9% | 6.95% |
| WACC | 10.7% - 13.0% | 11.9% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.51 | 0.6 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.1% | 13.4% |
| Tax rate | 1.8% | 2.3% |
| Debt/Equity ratio | 0.08 | 0.08 |
| Cost of debt | 6.0% | 7.9% |
| After-tax WACC | 10.7% | 13.0% |
| Selected WACC | 11.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| HINDOILEXP.NS | Hindustan Oil Exploration Company Ltd | 0.08 | 1.32 | 1.23 |
| 3395.HK | Persta Resources Inc | 0.46 | -1.57 | -1.08 |
| 513536.BO | Gujarat Natural Resources Ltd | 0.02 | 0.23 | 0.23 |
| AJQ.AX | Armour Energy Ltd | 3.44 | -1.75 | -0.4 |
| BYE.AX | Byron Energy Ltd | 0.17 | 0.39 | 0.33 |
| EEG.AX | Empire Energy Group Ltd | 0.01 | -0.17 | -0.17 |
| KKO.AX | Kinetiko Energy Ltd | 0.02 | 0.27 | 0.27 |
| NGY.AX | Nuenergy Gas Ltd | 0.14 | 0.48 | 0.42 |
| OIL.NS | Oil India Ltd | 0.33 | 1.34 | 1.01 |
| SELAN.NS | Selan Exploration Technology Ltd | 0.01 | 1.64 | 1.63 |
| Low | High | |
| Unlevered beta | 0.25 | 0.37 |
| Relevered beta | 0.27 | 0.4 |
| Adjusted relevered beta | 0.51 | 0.6 |
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 (12.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.51) + 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.