523411.BO WACC - Weighted Average Cost of Capital

The WACC of ADC India Communications Ltd (523411.BO) is 12.5%.

The Cost of Equity of ADC India Communications Ltd (523411.BO) is 19.50%.

The Cost of Debt of ADC India Communications Ltd (523411.BO) is 7.50%.

	Range	Selected
Cost of equity	16.40% - 22.60%	19.50%
Tax rate	25.40% - 25.70%	25.55%
Cost of debt	7.50% - 7.50%	7.50%
WACC	11.0% - 14.1%	12.5%

WACC

523411.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.15	1.59

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.40%	22.60%

Tax rate	25.40%	25.70%
Debt/Equity ratio	1	1
Cost of debt	7.50%	7.50%

After-tax WACC	11.0%	14.1%


Selected WACC	12.5%

523411.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 523411.BO:

cost_of_equity (19.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.15) + 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.