BAJAJHLDNG.NS WACC - Weighted Average Cost of Capital

The WACC of Bajaj Holdings and Investment Ltd (BAJAJHLDNG.NS) is 12.7%.

The Cost of Equity of Bajaj Holdings and Investment Ltd (BAJAJHLDNG.NS) is 12.70%.

The Cost of Debt of Bajaj Holdings and Investment Ltd (BAJAJHLDNG.NS) is 5.75%.

	Range	Selected
Cost of equity	10.00% - 15.40%	12.70%
Tax rate	2.10% - 2.60%	2.35%
Cost of debt	4.00% - 7.50%	5.75%
WACC	10.0% - 15.4%	12.7%

WACC

BAJAJHLDNG.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.38	0.81

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.00%	15.40%

Tax rate	2.10%	2.60%
Debt/Equity ratio	0	0
Cost of debt	4.00%	7.50%

After-tax WACC	10.0%	15.4%


Selected WACC	12.7%

BAJAJHLDNG.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 BAJAJHLDNG.NS:

cost_of_equity (12.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.38) + 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.