CHEMFAB.NS WACC - Weighted Average Cost of Capital

The WACC of Chemfab Alkalis Ltd (CHEMFAB.NS) is 16.3%.

The Cost of Equity of Chemfab Alkalis Ltd (CHEMFAB.NS) is 14.65%.

The Cost of Debt of Chemfab Alkalis Ltd (CHEMFAB.NS) is 39.65%.

	Range	Selected
Cost of equity	13.20% - 16.10%	14.65%
Tax rate	30.00% - 30.00%	30.00%
Cost of debt	18.60% - 60.70%	39.65%
WACC	13.2% - 19.3%	16.3%

WACC

CHEMFAB.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.76	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.20%	16.10%

Tax rate	30.00%	30.00%
Debt/Equity ratio	0.14	0.14
Cost of debt	18.60%	60.70%

After-tax WACC	13.2%	19.3%


Selected WACC	16.3%

CHEMFAB.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 CHEMFAB.NS:

cost_of_equity (14.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.76) + 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.