BIOCON.NS WACC - Weighted Average Cost of Capital

The WACC of Biocon Ltd (BIOCON.NS) is 12.7%.

The Cost of Equity of Biocon Ltd (BIOCON.NS) is 15.60%.

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

	Range	Selected
Cost of equity	13.90% - 17.30%	15.60%
Tax rate	21.20% - 22.60%	21.90%
Cost of debt	5.10% - 8.30%	6.70%
WACC	11.2% - 14.3%	12.7%

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	0.85	1.01

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.90%	17.30%

Tax rate	21.20%	22.60%
Debt/Equity ratio	0.38	0.38
Cost of debt	5.10%	8.30%

After-tax WACC	11.2%	14.3%


Selected WACC	12.7%

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 (15.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.85) + 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.