HONDAPOWER.NS
Honda India Power Products Ltd
Price:  
2,900.6 
INR
Volume:  
10,493
India | Machinery

HONDAPOWER.NS WACC - Weighted Average Cost of Capital

The WACC of Honda India Power Products Ltd (HONDAPOWER.NS) is 15.0%.

The Cost of Equity of Honda India Power Products Ltd (HONDAPOWER.NS) is 15.05%.
The Cost of Debt of Honda India Power Products Ltd (HONDAPOWER.NS) is 21.05%.

RangeSelected
Cost of equity12.9% - 17.2%15.05%
Tax rate25.9% - 26.3%26.1%
Cost of debt7.5% - 34.6%21.05%
WACC12.9% - 17.2%15.0%
WACC

HONDAPOWER.NS WACC calculation

CategoryLowHigh
Long-term bond rate6.9%7.4%
Equity market risk premium8.3%9.3%
Adjusted beta0.721.01
Additional risk adjustments0.0%0.5%
Cost of equity12.9%17.2%
Tax rate25.9%26.3%
Debt/Equity ratio
00
Cost of debt7.5%34.6%
After-tax WACC12.9%17.2%
Selected WACC15.0%

HONDAPOWER.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 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.