BIRLACORPN.NS WACC - Weighted Average Cost of Capital

The WACC of Birla Corporation Ltd (BIRLACORPN.NS) is 12.8%.

The Cost of Equity of Birla Corporation Ltd (BIRLACORPN.NS) is 15.95%.

The Cost of Debt of Birla Corporation Ltd (BIRLACORPN.NS) is 8.25%.

	Range	Selected
Cost of equity	14.70% - 17.20%	15.95%
Tax rate	17.80% - 23.50%	20.65%
Cost of debt	7.90% - 8.60%	8.25%
WACC	11.9% - 13.6%	12.8%

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	0.94	1.01

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.70%	17.20%

Tax rate	17.80%	23.50%
Debt/Equity ratio	0.51	0.51
Cost of debt	7.90%	8.60%

After-tax WACC	11.9%	13.6%


Selected WACC	12.8%

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 (15.95%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.94) + 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.