CENTRUM.NS WACC - Weighted Average Cost of Capital

The WACC of Centrum Capital Ltd (CENTRUM.NS) is 8.3%.

The Cost of Equity of Centrum Capital Ltd (CENTRUM.NS) is 60.80%.

The Cost of Debt of Centrum Capital Ltd (CENTRUM.NS) is 6.25%.

	Range	Selected
Cost of equity	46.40% - 75.20%	60.80%
Tax rate	7.90% - 15.20%	11.55%
Cost of debt	4.60% - 7.90%	6.25%
WACC	6.4% - 10.2%	8.3%

WACC

CENTRUM.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	4.75	7.23

Additional risk adjustments	0.0%	0.5%
Cost of equity	46.40%	75.20%

Tax rate	7.90%	15.20%
Debt/Equity ratio	18.64	18.64
Cost of debt	4.60%	7.90%

After-tax WACC	6.4%	10.2%


Selected WACC	8.3%

CENTRUM.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 CENTRUM.NS:

cost_of_equity (60.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (4.75) + 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.