BIRLAMONEY.NS WACC - Weighted Average Cost of Capital

The WACC of Aditya Birla Money Ltd (BIRLAMONEY.NS) is 12.6%.

The Cost of Equity of Aditya Birla Money Ltd (BIRLAMONEY.NS) is 21.10%.

The Cost of Debt of Aditya Birla Money Ltd (BIRLAMONEY.NS) is 9.60%.

	Range	Selected
Cost of equity	19.30% - 22.90%	21.10%
Tax rate	25.90% - 27.00%	26.45%
Cost of debt	7.10% - 12.10%	9.60%
WACC	10.8% - 14.4%	12.6%

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	1.5	1.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	19.30%	22.90%

Tax rate	25.90%	27.00%
Debt/Equity ratio	1.52	1.52
Cost of debt	7.10%	12.10%

After-tax WACC	10.8%	14.4%


Selected WACC	12.6%

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 (21.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.5) + 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.