BAJAJELEC.NS WACC - Weighted Average Cost of Capital

The WACC of Bajaj Electricals Ltd (BAJAJELEC.NS) is 15.3%.

The Cost of Equity of Bajaj Electricals Ltd (BAJAJELEC.NS) is 15.35%.

The Cost of Debt of Bajaj Electricals Ltd (BAJAJELEC.NS) is 20.05%.

	Range	Selected
Cost of equity	13.60% - 17.10%	15.35%
Tax rate	22.60% - 24.00%	23.30%
Cost of debt	10.00% - 30.10%	20.05%
WACC	13.4% - 17.3%	15.3%

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	0.81	0.99

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.60%	17.10%

Tax rate	22.60%	24.00%
Debt/Equity ratio	0.03	0.03
Cost of debt	10.00%	30.10%

After-tax WACC	13.4%	17.3%


Selected WACC	15.3%

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 (15.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.81) + 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.