CLNINDIA.NS WACC - Weighted Average Cost of Capital

The WACC of Clariant Chemicals India Ltd (CLNINDIA.NS) is 21.5%.

The Cost of Equity of Clariant Chemicals India Ltd (CLNINDIA.NS) is 16.40%.

The Cost of Debt of Clariant Chemicals India Ltd (CLNINDIA.NS) is 40.10%.

	Range	Selected
Cost of equity	14.60% - 18.20%	16.40%
Tax rate	26.60% - 34.50%	30.55%
Cost of debt	7.90% - 72.30%	40.10%
WACC	10.2% - 32.8%	21.5%

WACC

CLNINDIA.NS WACC calculation

Category	Low	High

Long-term bond rate	7.2%	7.7%
Equity market risk premium	8.8%	9.8%
Adjusted beta	0.83	1.02

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.60%	18.20%

Tax rate	26.60%	34.50%
Debt/Equity ratio	1	1
Cost of debt	7.90%	72.30%

After-tax WACC	10.2%	32.8%


Selected WACC	21.5%

CLNINDIA.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 CLNINDIA.NS:

cost_of_equity (16.40%) = risk_free_rate (7.45%) + equity_risk_premium (9.30%) * adjusted_beta (0.83) + 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.