BODALCHEM.NS WACC - Weighted Average Cost of Capital

The WACC of Bodal Chemicals Ltd (BODALCHEM.NS) is 13.2%.

The Cost of Equity of Bodal Chemicals Ltd (BODALCHEM.NS) is 19.60%.

The Cost of Debt of Bodal Chemicals Ltd (BODALCHEM.NS) is 9.30%.

	Range	Selected
Cost of equity	16.90% - 22.30%	19.60%
Tax rate	27.60% - 29.10%	28.35%
Cost of debt	6.50% - 12.10%	9.30%
WACC	10.9% - 15.6%	13.2%

WACC

BODALCHEM.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.21	1.55

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.90%	22.30%

Tax rate	27.60%	29.10%
Debt/Equity ratio	0.96	0.96
Cost of debt	6.50%	12.10%

After-tax WACC	10.9%	15.6%


Selected WACC	13.2%

BODALCHEM.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 BODALCHEM.NS:

cost_of_equity (19.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.21) + 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.