CROMPTON.NS WACC - Weighted Average Cost of Capital

The WACC of Crompton Greaves Consumer Electricals Ltd (CROMPTON.NS) is 14.3%.

The Cost of Equity of Crompton Greaves Consumer Electricals Ltd (CROMPTON.NS) is 14.55%.

The Cost of Debt of Crompton Greaves Consumer Electricals Ltd (CROMPTON.NS) is 7.50%.

	Range	Selected
Cost of equity	13.30% - 15.80%	14.55%
Tax rate	22.60% - 23.00%	22.80%
Cost of debt	7.50% - 7.50%	7.50%
WACC	13.1% - 15.6%	14.3%

WACC

CROMPTON.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.78	0.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.30%	15.80%

Tax rate	22.60%	23.00%
Debt/Equity ratio	0.03	0.03
Cost of debt	7.50%	7.50%

After-tax WACC	13.1%	15.6%


Selected WACC	14.3%

CROMPTON.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 CROMPTON.NS:

cost_of_equity (14.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.78) + 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.