HUBTOWN.NS WACC - Weighted Average Cost of Capital

The WACC of Hubtown Ltd (HUBTOWN.NS) is 13.7%.

The Cost of Equity of Hubtown Ltd (HUBTOWN.NS) is 13.45%.

The Cost of Debt of Hubtown Ltd (HUBTOWN.NS) is 16.55%.

	Range	Selected
Cost of equity	10.30% - 16.60%	13.45%
Tax rate	1.90% - 18.70%	10.30%
Cost of debt	14.50% - 18.60%	16.55%
WACC	11.2% - 16.3%	13.7%

WACC

HUBTOWN.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.41	0.94

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.30%	16.60%

Tax rate	1.90%	18.70%
Debt/Equity ratio	0.31	0.31
Cost of debt	14.50%	18.60%

After-tax WACC	11.2%	16.3%


Selected WACC	13.7%

HUBTOWN.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 HUBTOWN.NS:

cost_of_equity (13.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.41) + 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.