CADILAHC.NS WACC - Weighted Average Cost of Capital

The WACC of Cadila Healthcare Ltd (CADILAHC.NS) is 12.5%.

The Cost of Equity of Cadila Healthcare Ltd (CADILAHC.NS) is 13.25%.

The Cost of Debt of Cadila Healthcare Ltd (CADILAHC.NS) is 8.20%.

	Range	Selected
Cost of equity	12.10% - 14.40%	13.25%
Tax rate	16.00% - 21.70%	18.85%
Cost of debt	8.20% - 8.20%	8.20%
WACC	11.5% - 13.6%	12.5%

WACC

CADILAHC.NS WACC calculation

Category	Low	High

Long-term bond rate	7.5%	8.0%
Equity market risk premium	6.9%	7.9%
Adjusted beta	0.66	0.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.10%	14.40%

Tax rate	16.00%	21.70%
Debt/Equity ratio	0.12	0.12
Cost of debt	8.20%	8.20%

After-tax WACC	11.5%	13.6%


Selected WACC	12.5%

CADILAHC.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 CADILAHC.NS:

cost_of_equity (13.25%) = risk_free_rate (7.75%) + equity_risk_premium (7.40%) * adjusted_beta (0.66) + 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.