ASIANPAINT.NS WACC - Weighted Average Cost of Capital

The WACC of Asian Paints Ltd (ASIANPAINT.NS) is 14.6%.

The Cost of Equity of Asian Paints Ltd (ASIANPAINT.NS) is 14.70%.

The Cost of Debt of Asian Paints Ltd (ASIANPAINT.NS) is 8.15%.

	Range	Selected
Cost of equity	13.40% - 16.00%	14.70%
Tax rate	26.00% - 26.30%	26.15%
Cost of debt	7.50% - 8.80%	8.15%
WACC	13.3% - 15.9%	14.6%

WACC

ASIANPAINT.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.78	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.40%	16.00%

Tax rate	26.00%	26.30%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.50%	8.80%

After-tax WACC	13.3%	15.9%


Selected WACC	14.6%

ASIANPAINT.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 ASIANPAINT.NS:

cost_of_equity (14.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.78) + 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.