ALPA.NS WACC - Weighted Average Cost of Capital

The WACC of Alpa Laboratories Ltd (ALPA.NS) is 18.1%.

The Cost of Equity of Alpa Laboratories Ltd (ALPA.NS) is 19.30%.

The Cost of Debt of Alpa Laboratories Ltd (ALPA.NS) is 22.50%.

	Range	Selected
Cost of equity	17.70% - 20.90%	19.30%
Tax rate	22.70% - 25.60%	24.15%
Cost of debt	7.50% - 37.50%	22.50%
WACC	11.7% - 24.4%	18.1%

WACC

ALPA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.31	1.4

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.70%	20.90%

Tax rate	22.70%	25.60%
Debt/Equity ratio	1	1
Cost of debt	7.50%	37.50%

After-tax WACC	11.7%	24.4%


Selected WACC	18.1%

ALPA.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 ALPA.NS:

cost_of_equity (19.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.31) + 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.