BALPHARMA.NS WACC - Weighted Average Cost of Capital

The WACC of Bal Pharma Ltd (BALPHARMA.NS) is 13.6%.

The Cost of Equity of Bal Pharma Ltd (BALPHARMA.NS) is 18.05%.

The Cost of Debt of Bal Pharma Ltd (BALPHARMA.NS) is 13.40%.

	Range	Selected
Cost of equity	16.80% - 19.30%	18.05%
Tax rate	29.80% - 39.10%	34.45%
Cost of debt	11.40% - 15.40%	13.40%
WACC	12.6% - 14.5%	13.6%

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	1.19	1.23

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.80%	19.30%

Tax rate	29.80%	39.10%
Debt/Equity ratio	0.91	0.91
Cost of debt	11.40%	15.40%

After-tax WACC	12.6%	14.5%


Selected WACC	13.6%

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 (18.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.19) + 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.