The WACC of Ballarpur Industries Ltd (BALLARPUR.NS) is 14.7%.
| Range | Selected | |
| Cost of equity | 16,722.00% - 57,543.80% | 37,132.90% |
| Tax rate | 6.40% - 10.90% | 8.65% |
| Cost of debt | 4.40% - 23.90% | 14.15% |
| WACC | 5.0% - 24.3% | 14.7% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 2011.45 | 6180.01 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 16,722.00% | 57,543.80% |
| Tax rate | 6.40% | 10.90% |
| Debt/Equity ratio | 18662.45 | 18662.45 |
| Cost of debt | 4.40% | 23.90% |
| After-tax WACC | 5.0% | 24.3% |
| Selected WACC | 14.7% | |
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 BALLARPUR.NS:
cost_of_equity (37,132.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (2011.45) + 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.