506808.BO
Tuticorin Alkali Chemicals and Fertilizers Ltd
Price:  
81.43 
INR
Volume:  
22,108
India | Chemicals

506808.BO WACC - Weighted Average Cost of Capital

The WACC of Tuticorin Alkali Chemicals and Fertilizers Ltd (506808.BO) is 16.0%.

The Cost of Equity of Tuticorin Alkali Chemicals and Fertilizers Ltd (506808.BO) is 15.5%.
The Cost of Debt of Tuticorin Alkali Chemicals and Fertilizers Ltd (506808.BO) is 22.7%.

RangeSelected
Cost of equity13.7% - 17.3%15.5%
Tax rate2.7% - 11.4%7.05%
Cost of debt7.5% - 37.9%22.7%
WACC13.1% - 18.8%16.0%
WACC

506808.BO WACC calculation

CategoryLowHigh
Long-term bond rate6.9%7.4%
Equity market risk premium8.3%9.3%
Adjusted beta0.831.01
Additional risk adjustments0.0%0.5%
Cost of equity13.7%17.3%
Tax rate2.7%11.4%
Debt/Equity ratio
0.10.1
Cost of debt7.5%37.9%
After-tax WACC13.1%18.8%
Selected WACC16.0%

506808.BO'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 506808.BO:

cost_of_equity (15.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.83) + 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.