IBULHSGFIN.NS WACC - Weighted Average Cost of Capital

The WACC of Indiabulls Housing Finance Ltd (IBULHSGFIN.NS) is 11.9%.

The Cost of Equity of Indiabulls Housing Finance Ltd (IBULHSGFIN.NS) is 16.50%.

The Cost of Debt of Indiabulls Housing Finance Ltd (IBULHSGFIN.NS) is 14.30%.

	Range	Selected
Cost of equity	13.10% - 19.90%	16.50%
Tax rate	23.80% - 25.10%	24.45%
Cost of debt	10.00% - 18.60%	14.30%
WACC	8.6% - 15.1%	11.9%

WACC

IBULHSGFIN.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.75	1.29

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.10%	19.90%

Tax rate	23.80%	25.10%
Debt/Equity ratio	4.25	4.25
Cost of debt	10.00%	18.60%

After-tax WACC	8.6%	15.1%


Selected WACC	11.9%

IBULHSGFIN.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 IBULHSGFIN.NS:

cost_of_equity (16.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.75) + 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.