BALRAMCHIN.NS WACC - Weighted Average Cost of Capital

The WACC of Balrampur Chini Mills Ltd (BALRAMCHIN.NS) is 11.6%.

The Cost of Equity of Balrampur Chini Mills Ltd (BALRAMCHIN.NS) is 13.30%.

The Cost of Debt of Balrampur Chini Mills Ltd (BALRAMCHIN.NS) is 6.25%.

	Range	Selected
Cost of equity	11.90% - 14.70%	13.30%
Tax rate	25.80% - 29.00%	27.40%
Cost of debt	4.40% - 8.10%	6.25%
WACC	10.2% - 12.9%	11.6%

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	0.61	0.73

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.90%	14.70%

Tax rate	25.80%	29.00%
Debt/Equity ratio	0.24	0.24
Cost of debt	4.40%	8.10%

After-tax WACC	10.2%	12.9%


Selected WACC	11.6%

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 (13.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.61) + 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.