BALRAMCHIN.NS WACC - Weighted Average Cost of Capital

The WACC of Balrampur Chini Mills Ltd (BALRAMCHIN.NS) is 16.2%.

The Cost of Equity of Balrampur Chini Mills Ltd (BALRAMCHIN.NS) is 18.40%.

The Cost of Debt of Balrampur Chini Mills Ltd (BALRAMCHIN.NS) is 6.05%.

	Range	Selected
Cost of equity	16.80% - 20.00%	18.40%
Tax rate	21.90% - 24.60%	23.25%
Cost of debt	4.00% - 8.10%	6.05%
WACC	14.6% - 17.8%	16.2%

WACC

BALRAMCHIN.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	1.3

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.80%	20.00%

Tax rate	21.90%	24.60%
Debt/Equity ratio	0.19	0.19
Cost of debt	4.00%	8.10%

After-tax WACC	14.6%	17.8%


Selected WACC	16.2%

BALRAMCHIN.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 BALRAMCHIN.NS:

cost_of_equity (18.40%) = 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.