ASHOKA.NS WACC - Weighted Average Cost of Capital

The WACC of Ashoka Buildcon Ltd (ASHOKA.NS) is 15.5%.

The Cost of Equity of Ashoka Buildcon Ltd (ASHOKA.NS) is 22.25%.

The Cost of Debt of Ashoka Buildcon Ltd (ASHOKA.NS) is 12.45%.

	Range	Selected
Cost of equity	18.50% - 26.00%	22.25%
Tax rate	29.40% - 38.50%	33.95%
Cost of debt	9.10% - 15.80%	12.45%
WACC	12.7% - 18.2%	15.5%

WACC

ASHOKA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.4	1.95

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.50%	26.00%

Tax rate	29.40%	38.50%
Debt/Equity ratio	0.92	0.92
Cost of debt	9.10%	15.80%

After-tax WACC	12.7%	18.2%


Selected WACC	15.5%

ASHOKA.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 ASHOKA.NS:

cost_of_equity (22.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.4) + 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.