CTE.NS
Cambridge Technology Enterprises Ltd
Price:  
45.21 
INR
Volume:  
2,547.00
India | IT Services
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CTE.NS WACC - Weighted Average Cost of Capital

The WACC of Cambridge Technology Enterprises Ltd (CTE.NS) is 10.4%.

The Cost of Equity of Cambridge Technology Enterprises Ltd (CTE.NS) is 14.70%.
The Cost of Debt of Cambridge Technology Enterprises Ltd (CTE.NS) is 7.15%.

Range Selected
Cost of equity 12.60% - 16.80% 14.70%
Tax rate 12.60% - 17.90% 15.25%
Cost of debt 7.00% - 7.30% 7.15%
WACC 9.3% - 11.4% 10.4%
WACC

CTE.NS WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.69 0.96
Additional risk adjustments 0.0% 0.5%
Cost of equity 12.60% 16.80%
Tax rate 12.60% 17.90%
Debt/Equity ratio 1.01 1.01
Cost of debt 7.00% 7.30%
After-tax WACC 9.3% 11.4%
Selected WACC 10.4%

CTE.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 CTE.NS:

cost_of_equity (14.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.69) + 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.