APLAPOLLO.NS WACC - Weighted Average Cost of Capital

The WACC of APL Apollo Tubes Ltd (APLAPOLLO.NS) is 16.8%.

The Cost of Equity of APL Apollo Tubes Ltd (APLAPOLLO.NS) is 17.10%.

The Cost of Debt of APL Apollo Tubes Ltd (APLAPOLLO.NS) is 8.55%.

	Range	Selected
Cost of equity	15.70% - 18.50%	17.10%
Tax rate	25.20% - 25.40%	25.30%
Cost of debt	7.90% - 9.20%	8.55%
WACC	15.5% - 18.2%	16.8%

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	1.07	1.14

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.70%	18.50%

Tax rate	25.20%	25.40%
Debt/Equity ratio	0.03	0.03
Cost of debt	7.90%	9.20%

After-tax WACC	15.5%	18.2%


Selected WACC	16.8%

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 (17.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.07) + 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.