COCHINSHIP.NS
Cochin Shipyard Ltd
Price:  
2,051.7 
INR
Volume:  
1,408,214
India | Machinery

COCHINSHIP.NS WACC - Weighted Average Cost of Capital

The WACC of Cochin Shipyard Ltd (COCHINSHIP.NS) is 16.3%.

The Cost of Equity of Cochin Shipyard Ltd (COCHINSHIP.NS) is 16.45%.
The Cost of Debt of Cochin Shipyard Ltd (COCHINSHIP.NS) is 5.75%.

RangeSelected
Cost of equity14.5% - 18.4%16.45%
Tax rate26.4% - 26.6%26.5%
Cost of debt4.0% - 7.5%5.75%
WACC14.4% - 18.3%16.3%
WACC

COCHINSHIP.NS WACC calculation

CategoryLowHigh
Long-term bond rate6.9%7.4%
Equity market risk premium8.3%9.3%
Adjusted beta0.921.13
Additional risk adjustments0.0%0.5%
Cost of equity14.5%18.4%
Tax rate26.4%26.6%
Debt/Equity ratio
0.010.01
Cost of debt4.0%7.5%
After-tax WACC14.4%18.3%
Selected WACC16.3%

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 (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.