The WACC of Honda India Power Products Ltd (HONDAPOWER.NS) is 15.0%.
Range | Selected | |
Cost of equity | 12.9% - 17.2% | 15.05% |
Tax rate | 25.9% - 26.3% | 26.1% |
Cost of debt | 7.5% - 34.6% | 21.05% |
WACC | 12.9% - 17.2% | 15.0% |
Category | Low | High |
Long-term bond rate | 6.9% | 7.4% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 0.72 | 1.01 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 12.9% | 17.2% |
Tax rate | 25.9% | 26.3% |
Debt/Equity ratio | 0 | 0 |
Cost of debt | 7.5% | 34.6% |
After-tax WACC | 12.9% | 17.2% |
Selected WACC | 15.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
HONDAPOWER.NS | Honda India Power Products Ltd | 0 | 1.42 | 1.42 |
505872.BO | WPIL Ltd | 0.05 | 1.21 | 1.17 |
517417.BO | Patels Airtemp (India) Ltd | 0.32 | 0.74 | 0.6 |
ADORWELD.NS | Ador Welding Ltd | 0.03 | 0.95 | 0.93 |
ANUP.NS | Anup Engineering Ltd | 0 | 0.39 | 0.38 |
JASH.NS | Jash Engineering Ltd | 0.03 | 0.58 | 0.57 |
NITINFIRE.NS | Nitin Fire Protection Industries Ltd | 11.83 | 0.92 | 0.09 |
NRBBEARING.NS | NRB Bearings Ltd | 0.07 | 1.29 | 1.23 |
VESUVIUS.NS | Vesuvius India Ltd | 0 | 1.12 | 1.12 |
Low | High | |
Unlevered beta | 0.66 | 1.08 |
Relevered beta | 0.58 | 1.01 |
Adjusted relevered beta | 0.72 | 1.01 |
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 HONDAPOWER.NS:
cost_of_equity (15.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.72) + 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.