ADANIPOWER.NS WACC - Weighted Average Cost of Capital

The WACC of Adani Power Ltd (ADANIPOWER.NS) is 13.8%.

The Cost of Equity of Adani Power Ltd (ADANIPOWER.NS) is 15.25%.

The Cost of Debt of Adani Power Ltd (ADANIPOWER.NS) is 7.60%.

	Range	Selected
Cost of equity	13.80% - 16.70%	15.25%
Tax rate	15.40% - 31.10%	23.25%
Cost of debt	7.30% - 7.90%	7.60%
WACC	12.7% - 15.0%	13.8%

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	0.83	0.94

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.80%	16.70%

Tax rate	15.40%	31.10%
Debt/Equity ratio	0.17	0.17
Cost of debt	7.30%	7.90%

After-tax WACC	12.7%	15.0%


Selected WACC	13.8%

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 (15.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.83) + 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.