BASF.NS WACC - Weighted Average Cost of Capital

The WACC of BASF India Ltd (BASF.NS) is 14.1%.

The Cost of Equity of BASF India Ltd (BASF.NS) is 14.20%.

The Cost of Debt of BASF India Ltd (BASF.NS) is 6.10%.

	Range	Selected
Cost of equity	12.60% - 15.80%	14.20%
Tax rate	25.80% - 29.20%	27.50%
Cost of debt	4.70% - 7.50%	6.10%
WACC	12.5% - 15.7%	14.1%

WACC

BASF.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.69	0.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.60%	15.80%

Tax rate	25.80%	29.20%
Debt/Equity ratio	0.01	0.01
Cost of debt	4.70%	7.50%

After-tax WACC	12.5%	15.7%


Selected WACC	14.1%

BASF.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 BASF.NS:

cost_of_equity (14.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.69) + 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.