ADANIPOWER.NS WACC - Weighted Average Cost of Capital

The WACC of Adani Power Ltd (ADANIPOWER.NS) is 14.3%.

The Cost of Equity of Adani Power Ltd (ADANIPOWER.NS) is 15.75%.

The Cost of Debt of Adani Power Ltd (ADANIPOWER.NS) is 8.10%.

	Range	Selected
Cost of equity	14.50% - 17.00%	15.75%
Tax rate	24.00% - 31.10%	27.55%
Cost of debt	8.10% - 8.10%	8.10%
WACC	13.3% - 15.3%	14.3%

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	0.92	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.50%	17.00%

Tax rate	24.00%	31.10%
Debt/Equity ratio	0.18	0.18
Cost of debt	8.10%	8.10%

After-tax WACC	13.3%	15.3%


Selected WACC	14.3%

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 (15.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.92) + 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.