BEL.NS WACC - Weighted Average Cost of Capital

The WACC of Bharat Electronics Ltd (BEL.NS) is 16.2%.

The Cost of Equity of Bharat Electronics Ltd (BEL.NS) is 16.20%.

The Cost of Debt of Bharat Electronics Ltd (BEL.NS) is 41.35%.

	Range	Selected
Cost of equity	14.10% - 18.30%	16.20%
Tax rate	25.40% - 26.50%	25.95%
Cost of debt	7.50% - 75.20%	41.35%
WACC	14.1% - 18.3%	16.2%

WACC

BEL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.87	1.12

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.10%	18.30%

Tax rate	25.40%	26.50%
Debt/Equity ratio	0	0
Cost of debt	7.50%	75.20%

After-tax WACC	14.1%	18.3%


Selected WACC	16.2%

BEL.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 BEL.NS:

cost_of_equity (16.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.87) + 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.