CHEMCON.NS WACC - Weighted Average Cost of Capital

The WACC of Chemcon Speciality Chemicals Ltd (CHEMCON.NS) is 16.0%.

The Cost of Equity of Chemcon Speciality Chemicals Ltd (CHEMCON.NS) is 16.45%.

The Cost of Debt of Chemcon Speciality Chemicals Ltd (CHEMCON.NS) is 6.85%.

	Range	Selected
Cost of equity	14.90% - 18.00%	16.45%
Tax rate	25.80% - 26.00%	25.90%
Cost of debt	6.70% - 7.00%	6.85%
WACC	14.5% - 17.5%	16.0%

WACC

CHEMCON.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.96	1.09

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.90%	18.00%

Tax rate	25.80%	26.00%
Debt/Equity ratio	0.04	0.04
Cost of debt	6.70%	7.00%

After-tax WACC	14.5%	17.5%


Selected WACC	16.0%

CHEMCON.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 CHEMCON.NS:

cost_of_equity (16.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.96) + 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.