ADSL.NS WACC - Weighted Average Cost of Capital

The WACC of Allied Digital Services Ltd (ADSL.NS) is 16.9%.

The Cost of Equity of Allied Digital Services Ltd (ADSL.NS) is 17.60%.

The Cost of Debt of Allied Digital Services Ltd (ADSL.NS) is 8.10%.

	Range	Selected
Cost of equity	14.50% - 20.70%	17.60%
Tax rate	19.30% - 22.60%	20.95%
Cost of debt	7.60% - 8.60%	8.10%
WACC	14.0% - 19.7%	16.9%

WACC

ADSL.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	1.38

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.50%	20.70%

Tax rate	19.30%	22.60%
Debt/Equity ratio	0.07	0.07
Cost of debt	7.60%	8.60%

After-tax WACC	14.0%	19.7%


Selected WACC	16.9%

ADSL.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 ADSL.NS:

cost_of_equity (17.60%) = 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.