KAMATHOTEL.NS WACC - Weighted Average Cost of Capital

The WACC of Kamat Hotels (India) Ltd (KAMATHOTEL.NS) is 15.0%.

The Cost of Equity of Kamat Hotels (India) Ltd (KAMATHOTEL.NS) is 16.80%.

The Cost of Debt of Kamat Hotels (India) Ltd (KAMATHOTEL.NS) is 11.30%.

	Range	Selected
Cost of equity	14.80% - 18.80%	16.80%
Tax rate	19.30% - 22.40%	20.85%
Cost of debt	10.50% - 12.10%	11.30%
WACC	13.3% - 16.7%	15.0%

WACC

KAMATHOTEL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.95	1.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.80%	18.80%

Tax rate	19.30%	22.40%
Debt/Equity ratio	0.29	0.29
Cost of debt	10.50%	12.10%

After-tax WACC	13.3%	16.7%


Selected WACC	15.0%

KAMATHOTEL.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 KAMATHOTEL.NS:

cost_of_equity (16.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.95) + 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.