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 15.60%.

The Cost of Debt of Andhra Paper Ltd (ANDHRAPAP.NS) is 8.70%.

	Range	Selected
Cost of equity	13.90% - 17.30%	15.60%
Tax rate	25.70% - 25.80%	25.75%
Cost of debt	7.50% - 9.90%	8.70%
WACC	13.3% - 16.5%	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	0.85	1.01

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.90%	17.30%

Tax rate	25.70%	25.80%
Debt/Equity ratio	0.08	0.08
Cost of debt	7.50%	9.90%

After-tax WACC	13.3%	16.5%


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 (15.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.85) + 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.