ORIENTHOT.NS WACC - Weighted Average Cost of Capital

The WACC of Oriental Hotels Ltd (ORIENTHOT.NS) is 11.9%.

The Cost of Equity of Oriental Hotels Ltd (ORIENTHOT.NS) is 12.40%.

The Cost of Debt of Oriental Hotels Ltd (ORIENTHOT.NS) is 8.40%.

	Range	Selected
Cost of equity	11.10% - 13.70%	12.40%
Tax rate	27.70% - 28.80%	28.25%
Cost of debt	8.30% - 8.50%	8.40%
WACC	10.7% - 13.1%	11.9%

WACC

ORIENTHOT.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.51	0.63

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.10%	13.70%

Tax rate	27.70%	28.80%
Debt/Equity ratio	0.09	0.09
Cost of debt	8.30%	8.50%

After-tax WACC	10.7%	13.1%


Selected WACC	11.9%

ORIENTHOT.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 ORIENTHOT.NS:

cost_of_equity (12.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.51) + 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.