BIRLACABLE.NS WACC - Weighted Average Cost of Capital

The WACC of Birla Cable Ltd (BIRLACABLE.NS) is 15.0%.

The Cost of Equity of Birla Cable Ltd (BIRLACABLE.NS) is 16.40%.

The Cost of Debt of Birla Cable Ltd (BIRLACABLE.NS) is 10.80%.

	Range	Selected
Cost of equity	14.10% - 18.70%	16.40%
Tax rate	25.50% - 25.70%	25.60%
Cost of debt	9.50% - 12.10%	10.80%
WACC	12.9% - 17.0%	15.0%

WACC

BIRLACABLE.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	1.16

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.10%	18.70%

Tax rate	25.50%	25.70%
Debt/Equity ratio	0.2	0.2
Cost of debt	9.50%	12.10%

After-tax WACC	12.9%	17.0%


Selected WACC	15.0%

BIRLACABLE.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 BIRLACABLE.NS:

cost_of_equity (16.40%) = 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.