APOLLO.NS WACC - Weighted Average Cost of Capital

The WACC of Apollo Micro Systems Ltd (APOLLO.NS) is 15.7%.

The Cost of Equity of Apollo Micro Systems Ltd (APOLLO.NS) is 16.00%.

The Cost of Debt of Apollo Micro Systems Ltd (APOLLO.NS) is 13.40%.

	Range	Selected
Cost of equity	13.70% - 18.30%	16.00%
Tax rate	28.60% - 31.60%	30.10%
Cost of debt	10.00% - 16.80%	13.40%
WACC	13.5% - 18.0%	15.7%

WACC

APOLLO.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.82	1.12

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.70%	18.30%

Tax rate	28.60%	31.60%
Debt/Equity ratio	0.04	0.04
Cost of debt	10.00%	16.80%

After-tax WACC	13.5%	18.0%


Selected WACC	15.7%

APOLLO.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 APOLLO.NS:

cost_of_equity (16.00%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.82) + 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.