BGRENERGY.NS WACC - Weighted Average Cost of Capital

The WACC of BGR Energy Systems Ltd (BGRENERGY.NS) is 14.7%.

The Cost of Equity of BGR Energy Systems Ltd (BGRENERGY.NS) is 26.05%.

The Cost of Debt of BGR Energy Systems Ltd (BGRENERGY.NS) is 10.80%.

	Range	Selected
Cost of equity	18.60% - 33.50%	26.05%
Tax rate	18.70% - 24.00%	21.35%
Cost of debt	7.00% - 14.60%	10.80%
WACC	10.3% - 19.1%	14.7%

WACC

BGRENERGY.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.42	2.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.60%	33.50%

Tax rate	18.70%	24.00%
Debt/Equity ratio	1.8	1.8
Cost of debt	7.00%	14.60%

After-tax WACC	10.3%	19.1%


Selected WACC	14.7%

BGRENERGY.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 BGRENERGY.NS:

cost_of_equity (26.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.42) + 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.