CESC.NS WACC - Weighted Average Cost of Capital

The WACC of CESC Ltd (CESC.NS) is 13.3%.

The Cost of Equity of CESC Ltd (CESC.NS) is 18.15%.

The Cost of Debt of CESC Ltd (CESC.NS) is 8.10%.

	Range	Selected
Cost of equity	15.70% - 20.60%	18.15%
Tax rate	21.20% - 23.70%	22.45%
Cost of debt	8.10% - 8.10%	8.10%
WACC	11.9% - 14.7%	13.3%

WACC

CESC.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.06	1.37

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.70%	20.60%

Tax rate	21.20%	23.70%
Debt/Equity ratio	0.7	0.7
Cost of debt	8.10%	8.10%

After-tax WACC	11.9%	14.7%


Selected WACC	13.3%

CESC.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 CESC.NS:

cost_of_equity (18.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.06) + 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.