COALINDIA.NS WACC - Weighted Average Cost of Capital

The WACC of Coal India Ltd (COALINDIA.NS) is 11.9%.

The Cost of Equity of Coal India Ltd (COALINDIA.NS) is 12.35%.

The Cost of Debt of Coal India Ltd (COALINDIA.NS) is 5.90%.

	Range	Selected
Cost of equity	11.20% - 13.50%	12.35%
Tax rate	25.50% - 26.10%	25.80%
Cost of debt	4.30% - 7.50%	5.90%
WACC	10.8% - 13.1%	11.9%

WACC

COALINDIA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.53	0.6

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.20%	13.50%

Tax rate	25.50%	26.10%
Debt/Equity ratio	0.06	0.06
Cost of debt	4.30%	7.50%

After-tax WACC	10.8%	13.1%


Selected WACC	11.9%

COALINDIA.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 COALINDIA.NS:

cost_of_equity (12.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.53) + 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.