HNDFDS.NS WACC - Weighted Average Cost of Capital

The WACC of Hindustan Foods Ltd (HNDFDS.NS) is 14.8%.

The Cost of Equity of Hindustan Foods Ltd (HNDFDS.NS) is 15.75%.

The Cost of Debt of Hindustan Foods Ltd (HNDFDS.NS) is 9.70%.

	Range	Selected
Cost of equity	13.80% - 17.70%	15.75%
Tax rate	30.70% - 33.20%	31.95%
Cost of debt	9.10% - 10.30%	9.70%
WACC	13.0% - 16.6%	14.8%

WACC

HNDFDS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.84	1.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.80%	17.70%

Tax rate	30.70%	33.20%
Debt/Equity ratio	0.12	0.12
Cost of debt	9.10%	10.30%

After-tax WACC	13.0%	16.6%


Selected WACC	14.8%

HNDFDS.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 HNDFDS.NS:

cost_of_equity (15.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.84) + 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.