ADVENZYMES.NS WACC - Weighted Average Cost of Capital

The WACC of Advanced Enzyme Technologies Ltd (ADVENZYMES.NS) is 16.2%.

The Cost of Equity of Advanced Enzyme Technologies Ltd (ADVENZYMES.NS) is 16.40%.

The Cost of Debt of Advanced Enzyme Technologies Ltd (ADVENZYMES.NS) is 7.85%.

	Range	Selected
Cost of equity	14.80% - 18.00%	16.40%
Tax rate	27.40% - 27.80%	27.60%
Cost of debt	7.50% - 8.20%	7.85%
WACC	14.7% - 17.8%	16.2%

WACC

ADVENZYMES.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.95	1.09

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.80%	18.00%

Tax rate	27.40%	27.80%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.50%	8.20%

After-tax WACC	14.7%	17.8%


Selected WACC	16.2%

ADVENZYMES.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 ADVENZYMES.NS:

cost_of_equity (16.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.95) + 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.