DAAWAT.NS WACC - Weighted Average Cost of Capital

The WACC of LT Foods Ltd (DAAWAT.NS) is 15.7%.

The Cost of Equity of LT Foods Ltd (DAAWAT.NS) is 17.45%.

The Cost of Debt of LT Foods Ltd (DAAWAT.NS) is 6.95%.

	Range	Selected
Cost of equity	16.00% - 18.90%	17.45%
Tax rate	27.20% - 27.80%	27.50%
Cost of debt	5.30% - 8.60%	6.95%
WACC	14.3% - 17.1%	15.7%

WACC

DAAWAT.NS WACC calculation

Category	Low	High

Long-term bond rate	7.2%	7.7%
Equity market risk premium	8.8%	9.8%
Adjusted beta	1	1.08

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.00%	18.90%

Tax rate	27.20%	27.80%
Debt/Equity ratio	0.17	0.17
Cost of debt	5.30%	8.60%

After-tax WACC	14.3%	17.1%


Selected WACC	15.7%

DAAWAT.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 DAAWAT.NS:

cost_of_equity (17.45%) = risk_free_rate (7.45%) + equity_risk_premium (9.30%) * adjusted_beta (1) + 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.