ANDHRAPAP.NS WACC - Weighted Average Cost of Capital

The WACC of Andhra Paper Ltd (ANDHRAPAP.NS) is 14.9%.

The Cost of Equity of Andhra Paper Ltd (ANDHRAPAP.NS) is 15.30%.

The Cost of Debt of Andhra Paper Ltd (ANDHRAPAP.NS) is 12.05%.

	Range	Selected
Cost of equity	13.20% - 17.40%	15.30%
Tax rate	25.50% - 25.60%	25.55%
Cost of debt	7.80% - 16.30%	12.05%
WACC	12.7% - 17.1%	14.9%

WACC

ANDHRAPAP.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.76	1.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.20%	17.40%

Tax rate	25.50%	25.60%
Debt/Equity ratio	0.07	0.07
Cost of debt	7.80%	16.30%

After-tax WACC	12.7%	17.1%


Selected WACC	14.9%

ANDHRAPAP.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 ANDHRAPAP.NS:

cost_of_equity (15.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.76) + 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.