BPL.NS WACC - Weighted Average Cost of Capital

The WACC of BPL Ltd (BPL.NS) is 15.4%.

The Cost of Equity of BPL Ltd (BPL.NS) is 16.15%.

The Cost of Debt of BPL Ltd (BPL.NS) is 8.45%.

	Range	Selected
Cost of equity	14.10% - 18.20%	16.15%
Tax rate	30.00% - 30.00%	30.00%
Cost of debt	7.50% - 9.40%	8.45%
WACC	13.5% - 17.4%	15.4%

WACC

BPL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.87	1.11

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.10%	18.20%

Tax rate	30.00%	30.00%
Debt/Equity ratio	0.07	0.07
Cost of debt	7.50%	9.40%

After-tax WACC	13.5%	17.4%


Selected WACC	15.4%

BPL.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 BPL.NS:

cost_of_equity (16.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.87) + 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.