BIOCON.NS WACC - Weighted Average Cost of Capital

The WACC of Biocon Ltd (BIOCON.NS) is 12.4%.

The Cost of Equity of Biocon Ltd (BIOCON.NS) is 15.40%.

The Cost of Debt of Biocon Ltd (BIOCON.NS) is 6.70%.

	Range	Selected
Cost of equity	13.30% - 17.50%	15.40%
Tax rate	21.20% - 22.60%	21.90%
Cost of debt	5.10% - 8.30%	6.70%
WACC	10.6% - 14.3%	12.4%

WACC

BIOCON.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.77	1.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.30%	17.50%

Tax rate	21.20%	22.60%
Debt/Equity ratio	0.41	0.41
Cost of debt	5.10%	8.30%

After-tax WACC	10.6%	14.3%


Selected WACC	12.4%

BIOCON.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 BIOCON.NS:

cost_of_equity (15.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.77) + 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.