BIRLAMONEY.NS WACC - Weighted Average Cost of Capital

The WACC of Aditya Birla Money Ltd (BIRLAMONEY.NS) is 12.7%.

The Cost of Equity of Aditya Birla Money Ltd (BIRLAMONEY.NS) is 25.50%.

The Cost of Debt of Aditya Birla Money Ltd (BIRLAMONEY.NS) is 11.35%.

	Range	Selected
Cost of equity	22.90% - 28.10%	25.50%
Tax rate	26.90% - 27.20%	27.05%
Cost of debt	7.30% - 15.40%	11.35%
WACC	9.8% - 15.5%	12.7%

WACC

BIRLAMONEY.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.93	2.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	22.90%	28.10%

Tax rate	26.90%	27.20%
Debt/Equity ratio	2.93	2.93
Cost of debt	7.30%	15.40%

After-tax WACC	9.8%	15.5%


Selected WACC	12.7%

BIRLAMONEY.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 BIRLAMONEY.NS:

cost_of_equity (25.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.93) + 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.