COCHINSHIP.NS WACC - Weighted Average Cost of Capital

The WACC of Cochin Shipyard Ltd (COCHINSHIP.NS) is 15.8%.

The Cost of Equity of Cochin Shipyard Ltd (COCHINSHIP.NS) is 15.95%.

The Cost of Debt of Cochin Shipyard Ltd (COCHINSHIP.NS) is 5.75%.

	Range	Selected
Cost of equity	14.10% - 17.80%	15.95%
Tax rate	26.40% - 26.60%	26.50%
Cost of debt	4.00% - 7.50%	5.75%
WACC	13.9% - 17.6%	15.8%

WACC

COCHINSHIP.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.87	1.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.10%	17.80%

Tax rate	26.40%	26.60%
Debt/Equity ratio	0.01	0.01
Cost of debt	4.00%	7.50%

After-tax WACC	13.9%	17.6%


Selected WACC	15.8%

COCHINSHIP.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 COCHINSHIP.NS:

cost_of_equity (15.95%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.87) + 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.