The WACC of Cochin Shipyard Ltd (COCHINSHIP.NS) is 16.3%.
Range | Selected | |
Cost of equity | 14.5% - 18.4% | 16.45% |
Tax rate | 26.4% - 26.6% | 26.5% |
Cost of debt | 4.0% - 7.5% | 5.75% |
WACC | 14.4% - 18.3% | 16.3% |
Category | Low | High |
Long-term bond rate | 6.9% | 7.4% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 0.92 | 1.13 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 14.5% | 18.4% |
Tax rate | 26.4% | 26.6% |
Debt/Equity ratio | 0.01 | 0.01 |
Cost of debt | 4.0% | 7.5% |
After-tax WACC | 14.4% | 18.3% |
Selected WACC | 16.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
COCHINSHIP.NS | Cochin Shipyard Ltd | 0.01 | 2.42 | 2.4 |
505036.BO | Automobile Corp Of Goa Ltd | 0.08 | 1.16 | 1.1 |
6345.T | Aichi Corp | 0 | 0.54 | 0.54 |
ACE.NS | Action Construction Equipment Ltd | 0 | 1.32 | 1.31 |
ASHOKLEY.NS | Ashok Leyland Ltd | 0.33 | 1.13 | 0.91 |
BEML.NS | BEML Ltd | 0.01 | 1.94 | 1.93 |
FORCEMOT.NS | Force Motors Ltd | 0 | 1.44 | 1.43 |
REVATHI.NS | Revathi Equipment Ltd | 0.04 | 0.49 | 0.48 |
RNAVAL.NS | Reliance Naval and Engineering Ltd | 13.08 | 0.66 | 0.06 |
TIL.NS | TIL Ltd | 0.11 | 1.5 | 1.39 |
TWL.NS | Titagarh Wagons Ltd | 0.1 | 0.86 | 0.8 |
Low | High | |
Unlevered beta | 0.91 | 1.31 |
Relevered beta | 0.88 | 1.19 |
Adjusted relevered beta | 0.92 | 1.13 |
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 (16.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.92) + 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.