The WACC of Atlanta Ltd (ATLANTA.NS) is 15.2%.
| Range | Selected | |
| Cost of equity | 14.60% - 31.20% | 22.90% |
| Tax rate | 2.00% - 5.20% | 3.60% |
| Cost of debt | 4.80% - 23.20% | 14.00% |
| WACC | 6.6% - 23.8% | 15.2% |
| Category | Low | High |
| Long-term bond rate | 7.2% | 7.7% |
| Equity market risk premium | 8.8% | 9.8% |
| Adjusted beta | 0.84 | 2.34 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 14.60% | 31.20% |
| Tax rate | 2.00% | 5.20% |
| Debt/Equity ratio | 4.28 | 4.28 |
| Cost of debt | 4.80% | 23.20% |
| After-tax WACC | 6.6% | 23.8% |
| Selected WACC | 15.2% | |
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 ATLANTA.NS:
cost_of_equity (22.90%) = risk_free_rate (7.45%) + equity_risk_premium (9.30%) * adjusted_beta (0.84) + 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.