ACE.NS WACC - Weighted Average Cost of Capital

The WACC of Action Construction Equipment Ltd (ACE.NS) is 17.0%.

The Cost of Equity of Action Construction Equipment Ltd (ACE.NS) is 16.95%.

The Cost of Debt of Action Construction Equipment Ltd (ACE.NS) is 53.30%.

	Range	Selected
Cost of equity	15.70% - 18.20%	16.95%
Tax rate	24.00% - 25.00%	24.50%
Cost of debt	7.50% - 99.10%	53.30%
WACC	15.7% - 18.3%	17.0%

WACC

ACE.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	1.11

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.70%	18.20%

Tax rate	24.00%	25.00%
Debt/Equity ratio	0	0
Cost of debt	7.50%	99.10%

After-tax WACC	15.7%	18.3%


Selected WACC	17.0%

ACE.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 ACE.NS:

cost_of_equity (16.95%) = 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.