ALOKINDS.NS WACC - Weighted Average Cost of Capital

The WACC of Alok Industries Ltd (ALOKINDS.NS) is 10.1%.

The Cost of Equity of Alok Industries Ltd (ALOKINDS.NS) is 22.25%.

The Cost of Debt of Alok Industries Ltd (ALOKINDS.NS) is 5.50%.

	Range	Selected
Cost of equity	17.30% - 27.20%	22.25%
Tax rate	0.40% - 0.50%	0.45%
Cost of debt	4.00% - 7.00%	5.50%
WACC	7.7% - 12.6%	10.1%

WACC

ALOKINDS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.25	2.08

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.30%	27.20%

Tax rate	0.40%	0.50%
Debt/Equity ratio	2.59	2.59
Cost of debt	4.00%	7.00%

After-tax WACC	7.7%	12.6%


Selected WACC	10.1%

ALOKINDS.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 ALOKINDS.NS:

cost_of_equity (22.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.25) + 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.