HITECHGEAR.NS WACC - Weighted Average Cost of Capital

The WACC of Hi-Tech Gears Ltd (HITECHGEAR.NS) is 15.2%.

The Cost of Equity of Hi-Tech Gears Ltd (HITECHGEAR.NS) is 18.10%.

The Cost of Debt of Hi-Tech Gears Ltd (HITECHGEAR.NS) is 6.70%.

	Range	Selected
Cost of equity	16.60% - 19.60%	18.10%
Tax rate	26.00% - 41.70%	33.85%
Cost of debt	6.40% - 7.00%	6.70%
WACC	14.1% - 16.4%	15.2%

WACC

HITECHGEAR.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.17	1.26

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.60%	19.60%

Tax rate	26.00%	41.70%
Debt/Equity ratio	0.27	0.27
Cost of debt	6.40%	7.00%

After-tax WACC	14.1%	16.4%


Selected WACC	15.2%

HITECHGEAR.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 HITECHGEAR.NS:

cost_of_equity (18.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.17) + 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.