AGROPHOS.NS WACC - Weighted Average Cost of Capital

The WACC of Agro Phos India Ltd (AGROPHOS.NS) is 12.6%.

The Cost of Equity of Agro Phos India Ltd (AGROPHOS.NS) is 14.10%.

The Cost of Debt of Agro Phos India Ltd (AGROPHOS.NS) is 11.50%.

	Range	Selected
Cost of equity	11.20% - 17.00%	14.10%
Tax rate	15.40% - 21.20%	18.30%
Cost of debt	10.50% - 12.50%	11.50%
WACC	10.5% - 14.7%	12.6%

WACC

AGROPHOS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.53	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.20%	17.00%

Tax rate	15.40%	21.20%
Debt/Equity ratio	0.48	0.48
Cost of debt	10.50%	12.50%

After-tax WACC	10.5%	14.7%


Selected WACC	12.6%

AGROPHOS.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 AGROPHOS.NS:

cost_of_equity (14.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.53) + 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.