AGARIND.NS WACC - Weighted Average Cost of Capital

The WACC of Agarwal Industrial Corporation Ltd (AGARIND.NS) is 16.3%.

The Cost of Equity of Agarwal Industrial Corporation Ltd (AGARIND.NS) is 17.25%.

The Cost of Debt of Agarwal Industrial Corporation Ltd (AGARIND.NS) is 9.60%.

	Range	Selected
Cost of equity	15.20% - 19.30%	17.25%
Tax rate	16.50% - 17.20%	16.85%
Cost of debt	7.90% - 11.30%	9.60%
WACC	14.3% - 18.2%	16.3%

WACC

AGARIND.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.01	1.22

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.20%	19.30%

Tax rate	16.50%	17.20%
Debt/Equity ratio	0.11	0.11
Cost of debt	7.90%	11.30%

After-tax WACC	14.3%	18.2%


Selected WACC	16.3%

AGARIND.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 AGARIND.NS:

cost_of_equity (17.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.01) + 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.