BAYERCROP.NS WACC - Weighted Average Cost of Capital

The WACC of Bayer Cropscience Ltd (BAYERCROP.NS) is 16.8%.

The Cost of Equity of Bayer Cropscience Ltd (BAYERCROP.NS) is 16.80%.

The Cost of Debt of Bayer Cropscience Ltd (BAYERCROP.NS) is 9.45%.

	Range	Selected
Cost of equity	15.50% - 18.10%	16.80%
Tax rate	22.60% - 23.60%	23.10%
Cost of debt	7.50% - 11.40%	9.45%
WACC	15.4% - 18.1%	16.8%

WACC

BAYERCROP.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.04	1.1

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.50%	18.10%

Tax rate	22.60%	23.60%
Debt/Equity ratio	0	0
Cost of debt	7.50%	11.40%

After-tax WACC	15.4%	18.1%


Selected WACC	16.8%

BAYERCROP.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 BAYERCROP.NS:

cost_of_equity (16.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.04) + 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.