BLUESTARCO.NS WACC - Weighted Average Cost of Capital

The WACC of Blue Star Ltd (BLUESTARCO.NS) is 13.7%.

The Cost of Equity of Blue Star Ltd (BLUESTARCO.NS) is 13.80%.

The Cost of Debt of Blue Star Ltd (BLUESTARCO.NS) is 8.40%.

	Range	Selected
Cost of equity	11.70% - 15.90%	13.80%
Tax rate	27.00% - 29.70%	28.35%
Cost of debt	7.50% - 9.30%	8.40%
WACC	11.6% - 15.8%	13.7%

WACC

BLUESTARCO.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.58	0.86

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.70%	15.90%

Tax rate	27.00%	29.70%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.50%	9.30%

After-tax WACC	11.6%	15.8%


Selected WACC	13.7%

BLUESTARCO.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 BLUESTARCO.NS:

cost_of_equity (13.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.58) + 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.