CONFIPET.NS WACC - Weighted Average Cost of Capital

The WACC of Confidence Petroleum India Ltd (CONFIPET.NS) is 16.7%.

The Cost of Equity of Confidence Petroleum India Ltd (CONFIPET.NS) is 18.70%.

The Cost of Debt of Confidence Petroleum India Ltd (CONFIPET.NS) is 13.85%.

	Range	Selected
Cost of equity	17.40% - 20.00%	18.70%
Tax rate	24.90% - 25.60%	25.25%
Cost of debt	10.50% - 17.20%	13.85%
WACC	15.1% - 18.2%	16.7%

WACC

CONFIPET.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.27	1.3

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.40%	20.00%

Tax rate	24.90%	25.60%
Debt/Equity ratio	0.31	0.31
Cost of debt	10.50%	17.20%

After-tax WACC	15.1%	18.2%


Selected WACC	16.7%

CONFIPET.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 CONFIPET.NS:

cost_of_equity (18.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.27) + 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.