BROOKS.NS WACC - Weighted Average Cost of Capital

The WACC of Brooks Laboratories Ltd (BROOKS.NS) is 13.6%.

The Cost of Equity of Brooks Laboratories Ltd (BROOKS.NS) is 13.70%.

The Cost of Debt of Brooks Laboratories Ltd (BROOKS.NS) is 9.75%.

	Range	Selected
Cost of equity	11.20% - 16.20%	13.70%
Tax rate	16.60% - 19.10%	17.85%
Cost of debt	9.10% - 10.40%	9.75%
WACC	11.2% - 16.1%	13.6%

WACC

BROOKS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.52	0.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.20%	16.20%

Tax rate	16.60%	19.10%
Debt/Equity ratio	0.01	0.01
Cost of debt	9.10%	10.40%

After-tax WACC	11.2%	16.1%


Selected WACC	13.6%

BROOKS.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 BROOKS.NS:

cost_of_equity (13.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.52) + 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.