CIPLA.NS WACC - Weighted Average Cost of Capital

The WACC of Cipla Ltd (CIPLA.NS) is 13.7%.

The Cost of Equity of Cipla Ltd (CIPLA.NS) is 13.70%.

The Cost of Debt of Cipla Ltd (CIPLA.NS) is 6.50%.

	Range	Selected
Cost of equity	12.50% - 14.90%	13.70%
Tax rate	27.10% - 27.90%	27.50%
Cost of debt	5.50% - 7.50%	6.50%
WACC	12.5% - 14.9%	13.7%

WACC

CIPLA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.68	0.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.50%	14.90%

Tax rate	27.10%	27.90%
Debt/Equity ratio	0	0
Cost of debt	5.50%	7.50%

After-tax WACC	12.5%	14.9%


Selected WACC	13.7%

CIPLA.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 CIPLA.NS:

cost_of_equity (13.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.68) + 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.