ADANITRANS.NS WACC - Weighted Average Cost of Capital

The WACC of Adani Transmission Ltd (ADANITRANS.NS) is 12.1%.

The Cost of Equity of Adani Transmission Ltd (ADANITRANS.NS) is 13.55%.

The Cost of Debt of Adani Transmission Ltd (ADANITRANS.NS) is 10.65%.

	Range	Selected
Cost of equity	11.50% - 15.60%	13.55%
Tax rate	25.60% - 25.80%	25.70%
Cost of debt	8.10% - 13.20%	10.65%
WACC	10.1% - 14.1%	12.1%

WACC

ADANITRANS.NS WACC calculation

Category	Low	High

Long-term bond rate	7.2%	7.7%
Equity market risk premium	8.8%	9.8%
Adjusted beta	0.49	0.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	15.60%

Tax rate	25.60%	25.80%
Debt/Equity ratio	0.34	0.34
Cost of debt	8.10%	13.20%

After-tax WACC	10.1%	14.1%


Selected WACC	12.1%

ADANITRANS.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 ADANITRANS.NS:

cost_of_equity (13.55%) = risk_free_rate (7.45%) + equity_risk_premium (9.30%) * adjusted_beta (0.49) + 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.