ADANIGREEN.NS WACC - Weighted Average Cost of Capital

The WACC of Adani Green Energy Ltd (ADANIGREEN.NS) is 13.4%.

The Cost of Equity of Adani Green Energy Ltd (ADANIGREEN.NS) is 14.85%.

The Cost of Debt of Adani Green Energy Ltd (ADANIGREEN.NS) is 12.60%.

	Range	Selected
Cost of equity	12.00% - 17.70%	14.85%
Tax rate	13.50% - 20.60%	17.05%
Cost of debt	9.80% - 15.40%	12.60%
WACC	10.8% - 15.9%	13.4%

WACC

ADANIGREEN.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.61	1.05

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.00%	17.70%

Tax rate	13.50%	20.60%
Debt/Equity ratio	0.47	0.47
Cost of debt	9.80%	15.40%

After-tax WACC	10.8%	15.9%


Selected WACC	13.4%

ADANIGREEN.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 ADANIGREEN.NS:

cost_of_equity (14.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.61) + 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.