HOMEFIRST.NS WACC - Weighted Average Cost of Capital

The WACC of Home First Finance Company India Ltd (HOMEFIRST.NS) is 11.7%.

The Cost of Equity of Home First Finance Company India Ltd (HOMEFIRST.NS) is 13.85%.

The Cost of Debt of Home First Finance Company India Ltd (HOMEFIRST.NS) is 10.60%.

	Range	Selected
Cost of equity	12.50% - 15.20%	13.85%
Tax rate	23.20% - 23.70%	23.45%
Cost of debt	9.10% - 12.10%	10.60%
WACC	10.4% - 13.0%	11.7%

WACC

HOMEFIRST.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.68	0.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.50%	15.20%

Tax rate	23.20%	23.70%
Debt/Equity ratio	0.62	0.62
Cost of debt	9.10%	12.10%

After-tax WACC	10.4%	13.0%


Selected WACC	11.7%

HOMEFIRST.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 HOMEFIRST.NS:

cost_of_equity (13.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.68) + 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.