APOLLOTYRE.NS WACC - Weighted Average Cost of Capital

The WACC of Apollo Tyres Limited (APOLLOTYRE.NS) is 15.8%.

The Cost of Equity of Apollo Tyres Limited (APOLLOTYRE.NS) is 17.45%.

The Cost of Debt of Apollo Tyres Limited (APOLLOTYRE.NS) is 7.25%.

	Range	Selected
Cost of equity	16.30% - 18.60%	17.45%
Tax rate	25.90% - 28.90%	27.40%
Cost of debt	6.40% - 8.10%	7.25%
WACC	14.8% - 16.8%	15.8%

WACC

APOLLOTYRE.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.14	1.15

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.30%	18.60%

Tax rate	25.90%	28.90%
Debt/Equity ratio	0.16	0.16
Cost of debt	6.40%	8.10%

After-tax WACC	14.8%	16.8%


Selected WACC	15.8%

APOLLOTYRE.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 APOLLOTYRE.NS:

cost_of_equity (17.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.14) + 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.