CALSOFT.NS WACC - Weighted Average Cost of Capital

The WACC of California Software Company Ltd (CALSOFT.NS) is 9.5%.

The Cost of Equity of California Software Company Ltd (CALSOFT.NS) is 10.20%.

The Cost of Debt of California Software Company Ltd (CALSOFT.NS) is 5.00%.

	Range	Selected
Cost of equity	9.20% - 11.20%	10.20%
Tax rate	26.30% - 26.70%	26.50%
Cost of debt	5.00% - 5.00%	5.00%
WACC	8.6% - 10.3%	9.5%

WACC

CALSOFT.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.28	0.35

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.20%	11.20%

Tax rate	26.30%	26.70%
Debt/Equity ratio	0.12	0.12
Cost of debt	5.00%	5.00%

After-tax WACC	8.6%	10.3%


Selected WACC	9.5%

CALSOFT.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 CALSOFT.NS:

cost_of_equity (10.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.28) + 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.