BUTTERFLY.NS WACC - Weighted Average Cost of Capital

The WACC of Butterfly Gandhimathi Appliances Ltd (BUTTERFLY.NS) is 14.5%.

The Cost of Equity of Butterfly Gandhimathi Appliances Ltd (BUTTERFLY.NS) is 14.45%.

The Cost of Debt of Butterfly Gandhimathi Appliances Ltd (BUTTERFLY.NS) is 40.60%.

	Range	Selected
Cost of equity	13.20% - 15.70%	14.45%
Tax rate	29.20% - 32.70%	30.95%
Cost of debt	7.50% - 73.70%	40.60%
WACC	13.1% - 15.9%	14.5%

WACC

BUTTERFLY.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.76	0.84

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.20%	15.70%

Tax rate	29.20%	32.70%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.50%	73.70%

After-tax WACC	13.1%	15.9%


Selected WACC	14.5%

BUTTERFLY.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 BUTTERFLY.NS:

cost_of_equity (14.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.76) + 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.