BEL.NS WACC - Weighted Average Cost of Capital

The WACC of Bharat Electronics Ltd (BEL.NS) is 16.1%.

The Cost of Equity of Bharat Electronics Ltd (BEL.NS) is 16.10%.

The Cost of Debt of Bharat Electronics Ltd (BEL.NS) is 87.80%.

	Range	Selected
Cost of equity	14.00% - 18.20%	16.10%
Tax rate	25.40% - 25.60%	25.50%
Cost of debt	7.50% - 168.10%	87.80%
WACC	14.0% - 18.2%	16.1%

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	0.86	1.11

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.00%	18.20%

Tax rate	25.40%	25.60%
Debt/Equity ratio	0	0
Cost of debt	7.50%	168.10%

After-tax WACC	14.0%	18.2%


Selected WACC	16.1%

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 (16.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.86) + 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.