ASTEC.NS WACC - Weighted Average Cost of Capital

The WACC of Astec Lifesciences Ltd (ASTEC.NS) is 12.1%.

The Cost of Equity of Astec Lifesciences Ltd (ASTEC.NS) is 14.70%.

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

	Range	Selected
Cost of equity	12.40% - 17.00%	14.70%
Tax rate	25.10% - 26.20%	25.65%
Cost of debt	6.60% - 7.00%	6.80%
WACC	10.4% - 13.8%	12.1%

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	0.67	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.40%	17.00%

Tax rate	25.10%	26.20%
Debt/Equity ratio	0.37	0.37
Cost of debt	6.60%	7.00%

After-tax WACC	10.4%	13.8%


Selected WACC	12.1%

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 (14.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.67) + 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.