BIRLACORPN.NS WACC - Weighted Average Cost of Capital

The WACC of Birla Corporation Ltd (BIRLACORPN.NS) is 14.2%.

The Cost of Equity of Birla Corporation Ltd (BIRLACORPN.NS) is 16.55%.

The Cost of Debt of Birla Corporation Ltd (BIRLACORPN.NS) is 10.00%.

	Range	Selected
Cost of equity	14.90% - 18.20%	16.55%
Tax rate	20.20% - 25.90%	23.05%
Cost of debt	7.90% - 12.10%	10.00%
WACC	12.6% - 15.7%	14.2%

WACC

BIRLACORPN.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.97	1.11

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.90%	18.20%

Tax rate	20.20%	25.90%
Debt/Equity ratio	0.37	0.37
Cost of debt	7.90%	12.10%

After-tax WACC	12.6%	15.7%


Selected WACC	14.2%

BIRLACORPN.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 BIRLACORPN.NS:

cost_of_equity (16.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.97) + 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.