BDL.NS WACC - Weighted Average Cost of Capital

The WACC of Bharat Dynamics Ltd (BDL.NS) is 16.4%.

The Cost of Equity of Bharat Dynamics Ltd (BDL.NS) is 16.40%.

The Cost of Debt of Bharat Dynamics Ltd (BDL.NS) is 20.10%.

	Range	Selected
Cost of equity	15.00% - 17.80%	16.40%
Tax rate	26.60% - 27.30%	26.95%
Cost of debt	7.50% - 32.70%	20.10%
WACC	15.0% - 17.8%	16.4%

WACC

BDL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.98	1.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.00%	17.80%

Tax rate	26.60%	27.30%
Debt/Equity ratio	0	0
Cost of debt	7.50%	32.70%

After-tax WACC	15.0%	17.8%


Selected WACC	16.4%

BDL.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 BDL.NS:

cost_of_equity (16.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.98) + 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.