20MICRONS.NS WACC - Weighted Average Cost of Capital

The WACC of 20 Microns Ltd (20MICRONS.NS) is 17.1%.

The Cost of Equity of 20 Microns Ltd (20MICRONS.NS) is 18.35%.

The Cost of Debt of 20 Microns Ltd (20MICRONS.NS) is 12.65%.

	Range	Selected
Cost of equity	15.80% - 20.90%	18.35%
Tax rate	26.90% - 27.10%	27.00%
Cost of debt	7.90% - 17.40%	12.65%
WACC	14.4% - 19.8%	17.1%

WACC

20MICRONS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.07	1.4

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.80%	20.90%

Tax rate	26.90%	27.10%
Debt/Equity ratio	0.15	0.15
Cost of debt	7.90%	17.40%

After-tax WACC	14.4%	19.8%


Selected WACC	17.1%

20MICRONS.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 20MICRONS.NS:

cost_of_equity (18.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.07) + 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.