APLAPOLLO.NS WACC - Weighted Average Cost of Capital

The WACC of APL Apollo Tubes Ltd (APLAPOLLO.NS) is 16.1%.

The Cost of Equity of APL Apollo Tubes Ltd (APLAPOLLO.NS) is 16.20%.

The Cost of Debt of APL Apollo Tubes Ltd (APLAPOLLO.NS) is 9.05%.

	Range	Selected
Cost of equity	14.60% - 17.80%	16.20%
Tax rate	25.20% - 25.40%	25.30%
Cost of debt	7.50% - 10.60%	9.05%
WACC	14.5% - 17.6%	16.1%

WACC

APLAPOLLO.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.93	1.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.60%	17.80%

Tax rate	25.20%	25.40%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.50%	10.60%

After-tax WACC	14.5%	17.6%


Selected WACC	16.1%

APLAPOLLO.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 APLAPOLLO.NS:

cost_of_equity (16.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.93) + 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.