BALPHARMA.NS WACC - Weighted Average Cost of Capital

The WACC of Bal Pharma Ltd (BALPHARMA.NS) is 14.5%.

The Cost of Equity of Bal Pharma Ltd (BALPHARMA.NS) is 18.55%.

The Cost of Debt of Bal Pharma Ltd (BALPHARMA.NS) is 13.10%.

	Range	Selected
Cost of equity	17.00% - 20.10%	18.55%
Tax rate	16.60% - 25.80%	21.20%
Cost of debt	10.80% - 15.40%	13.10%
WACC	13.2% - 15.9%	14.5%

WACC

BALPHARMA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.22	1.31

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.00%	20.10%

Tax rate	16.60%	25.80%
Debt/Equity ratio	0.93	0.93
Cost of debt	10.80%	15.40%

After-tax WACC	13.2%	15.9%


Selected WACC	14.5%

BALPHARMA.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 BALPHARMA.NS:

cost_of_equity (18.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.22) + 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.