HINDZINC.NS WACC - Weighted Average Cost of Capital

The WACC of Hindustan Zinc Ltd (HINDZINC.NS) is 15.9%.

The Cost of Equity of Hindustan Zinc Ltd (HINDZINC.NS) is 16.30%.

The Cost of Debt of Hindustan Zinc Ltd (HINDZINC.NS) is 11.45%.

	Range	Selected
Cost of equity	14.40% - 18.20%	16.30%
Tax rate	25.00% - 27.90%	26.45%
Cost of debt	7.50% - 15.40%	11.45%
WACC	14.0% - 17.8%	15.9%

WACC

HINDZINC.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.91	1.11

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.40%	18.20%

Tax rate	25.00%	27.90%
Debt/Equity ratio	0.05	0.05
Cost of debt	7.50%	15.40%

After-tax WACC	14.0%	17.8%


Selected WACC	15.9%

HINDZINC.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 HINDZINC.NS:

cost_of_equity (16.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.91) + 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.