HNDFDS.NS WACC - Weighted Average Cost of Capital

The WACC of Hindustan Foods Ltd (HNDFDS.NS) is 14.3%.

The Cost of Equity of Hindustan Foods Ltd (HNDFDS.NS) is 15.40%.

The Cost of Debt of Hindustan Foods Ltd (HNDFDS.NS) is 9.55%.

	Range	Selected
Cost of equity	14.00% - 16.80%	15.40%
Tax rate	27.70% - 30.10%	28.90%
Cost of debt	9.10% - 10.00%	9.55%
WACC	13.1% - 15.6%	14.3%

WACC

HNDFDS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.86	0.96

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.00%	16.80%

Tax rate	27.70%	30.10%
Debt/Equity ratio	0.14	0.14
Cost of debt	9.10%	10.00%

After-tax WACC	13.1%	15.6%


Selected WACC	14.3%

HNDFDS.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 HNDFDS.NS:

cost_of_equity (15.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.86) + 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.