COSMOFILMS.NS WACC - Weighted Average Cost of Capital

The WACC of Cosmo Films Ltd (COSMOFILMS.NS) is 12.8%.

The Cost of Equity of Cosmo Films Ltd (COSMOFILMS.NS) is 15.05%.

The Cost of Debt of Cosmo Films Ltd (COSMOFILMS.NS) is 7.35%.

	Range	Selected
Cost of equity	13.40% - 16.70%	15.05%
Tax rate	19.80% - 25.10%	22.45%
Cost of debt	6.00% - 8.70%	7.35%
WACC	11.4% - 14.2%	12.8%

WACC

COSMOFILMS.NS WACC calculation

Category	Low	High

Long-term bond rate	7.5%	8.0%
Equity market risk premium	6.9%	7.9%
Adjusted beta	0.85	1.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.40%	16.70%

Tax rate	19.80%	25.10%
Debt/Equity ratio	0.32	0.32
Cost of debt	6.00%	8.70%

After-tax WACC	11.4%	14.2%


Selected WACC	12.8%

COSMOFILMS.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 COSMOFILMS.NS:

cost_of_equity (15.05%) = risk_free_rate (7.75%) + equity_risk_premium (7.40%) * adjusted_beta (0.85) + 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.