HIRECT.NS WACC - Weighted Average Cost of Capital

The WACC of Hind Rectifiers Ltd (HIRECT.NS) is 15.2%.

The Cost of Equity of Hind Rectifiers Ltd (HIRECT.NS) is 15.75%.

The Cost of Debt of Hind Rectifiers Ltd (HIRECT.NS) is 9.05%.

	Range	Selected
Cost of equity	12.60% - 18.90%	15.75%
Tax rate	27.20% - 28.30%	27.75%
Cost of debt	8.10% - 10.00%	9.05%
WACC	12.2% - 18.2%	15.2%

WACC

HIRECT.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.69	1.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.60%	18.90%

Tax rate	27.20%	28.30%
Debt/Equity ratio	0.07	0.07
Cost of debt	8.10%	10.00%

After-tax WACC	12.2%	18.2%


Selected WACC	15.2%

HIRECT.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 HIRECT.NS:

cost_of_equity (15.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.69) + 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.