ORIENTHOT.NS WACC - Weighted Average Cost of Capital

The WACC of Oriental Hotels Ltd (ORIENTHOT.NS) is 11.8%.

The Cost of Equity of Oriental Hotels Ltd (ORIENTHOT.NS) is 12.30%.

The Cost of Debt of Oriental Hotels Ltd (ORIENTHOT.NS) is 8.00%.

	Range	Selected
Cost of equity	11.10% - 13.50%	12.30%
Tax rate	28.90% - 29.80%	29.35%
Cost of debt	7.90% - 8.10%	8.00%
WACC	10.7% - 12.9%	11.8%

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	0.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.10%	13.50%

Tax rate	28.90%	29.80%
Debt/Equity ratio	0.08	0.08
Cost of debt	7.90%	8.10%

After-tax WACC	10.7%	12.9%


Selected WACC	11.8%

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 (12.30%) = 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.