BAJAJELEC.NS WACC - Weighted Average Cost of Capital

The WACC of Bajaj Electricals Ltd (BAJAJELEC.NS) is 14.3%.

The Cost of Equity of Bajaj Electricals Ltd (BAJAJELEC.NS) is 14.10%.

The Cost of Debt of Bajaj Electricals Ltd (BAJAJELEC.NS) is 22.15%.

	Range	Selected
Cost of equity	12.60% - 15.60%	14.10%
Tax rate	21.40% - 23.00%	22.20%
Cost of debt	15.40% - 28.90%	22.15%
WACC	12.6% - 16.0%	14.3%

WACC

BAJAJELEC.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.69	0.83

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.60%	15.60%

Tax rate	21.40%	23.00%
Debt/Equity ratio	0.06	0.06
Cost of debt	15.40%	28.90%

After-tax WACC	12.6%	16.0%


Selected WACC	14.3%

BAJAJELEC.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 BAJAJELEC.NS:

cost_of_equity (14.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.69) + 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.