20MICRONS.NS WACC - Weighted Average Cost of Capital

The WACC of 20 Microns Ltd (20MICRONS.NS) is 17.3%.

The Cost of Equity of 20 Microns Ltd (20MICRONS.NS) is 19.10%.

The Cost of Debt of 20 Microns Ltd (20MICRONS.NS) is 11.95%.

	Range	Selected
Cost of equity	16.60% - 21.60%	19.10%
Tax rate	26.40% - 26.80%	26.60%
Cost of debt	7.90% - 16.00%	11.95%
WACC	14.7% - 19.9%	17.3%

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	1.17	1.47

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.60%	21.60%

Tax rate	26.40%	26.80%
Debt/Equity ratio	0.21	0.21
Cost of debt	7.90%	16.00%

After-tax WACC	14.7%	19.9%


Selected WACC	17.3%

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 (19.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.17) + 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.