ADANIPOWER.NS WACC - Weighted Average Cost of Capital

The WACC of Adani Power Ltd (ADANIPOWER.NS) is 11.8%.

The Cost of Equity of Adani Power Ltd (ADANIPOWER.NS) is 12.35%.

The Cost of Debt of Adani Power Ltd (ADANIPOWER.NS) is 8.20%.

	Range	Selected
Cost of equity	10.40% - 14.30%	12.35%
Tax rate	19.80% - 23.40%	21.60%
Cost of debt	8.10% - 8.30%	8.20%
WACC	10.1% - 13.6%	11.8%

WACC

ADANIPOWER.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.43	0.69

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.40%	14.30%

Tax rate	19.80%	23.40%
Debt/Equity ratio	0.09	0.09
Cost of debt	8.10%	8.30%

After-tax WACC	10.1%	13.6%


Selected WACC	11.8%

ADANIPOWER.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 ADANIPOWER.NS:

cost_of_equity (12.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.43) + 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.