ASTEC.NS WACC - Weighted Average Cost of Capital

The WACC of Astec Lifesciences Ltd (ASTEC.NS) is 12.0%.

The Cost of Equity of Astec Lifesciences Ltd (ASTEC.NS) is 15.00%.

The Cost of Debt of Astec Lifesciences Ltd (ASTEC.NS) is 6.80%.

	Range	Selected
Cost of equity	12.10% - 17.90%	15.00%
Tax rate	25.10% - 26.20%	25.65%
Cost of debt	6.60% - 7.00%	6.80%
WACC	10.0% - 14.1%	12.0%

WACC

ASTEC.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.63	1.08

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.10%	17.90%

Tax rate	25.10%	26.20%
Debt/Equity ratio	0.43	0.43
Cost of debt	6.60%	7.00%

After-tax WACC	10.0%	14.1%


Selected WACC	12.0%

ASTEC.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 ASTEC.NS:

cost_of_equity (15.00%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.63) + 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.