HITECH.NS WACC - Weighted Average Cost of Capital

The WACC of Hi-Tech Pipes Ltd (HITECH.NS) is 16.6%.

The Cost of Equity of Hi-Tech Pipes Ltd (HITECH.NS) is 18.40%.

The Cost of Debt of Hi-Tech Pipes Ltd (HITECH.NS) is 10.75%.

	Range	Selected
Cost of equity	16.80% - 20.00%	18.40%
Tax rate	25.90% - 26.40%	26.15%
Cost of debt	10.00% - 11.50%	10.75%
WACC	15.2% - 18.0%	16.6%

WACC

HITECH.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.2	1.3

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.80%	20.00%

Tax rate	25.90%	26.40%
Debt/Equity ratio	0.2	0.2
Cost of debt	10.00%	11.50%

After-tax WACC	15.2%	18.0%


Selected WACC	16.6%

HITECH.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 HITECH.NS:

cost_of_equity (18.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.2) + 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.