DAMODARIND.NS WACC - Weighted Average Cost of Capital

The WACC of Damodar Industries Ltd (DAMODARIND.NS) is 8.4%.

The Cost of Equity of Damodar Industries Ltd (DAMODARIND.NS) is 16.90%.

The Cost of Debt of Damodar Industries Ltd (DAMODARIND.NS) is 10.40%.

	Range	Selected
Cost of equity	14.50% - 19.30%	16.90%
Tax rate	33.70% - 45.60%	39.65%
Cost of debt	8.70% - 12.10%	10.40%
WACC	7.6% - 9.2%	8.4%

WACC

DAMODARIND.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.92	1.22

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.50%	19.30%

Tax rate	33.70%	45.60%
Debt/Equity ratio	3.79	3.79
Cost of debt	8.70%	12.10%

After-tax WACC	7.6%	9.2%


Selected WACC	8.4%

DAMODARIND.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 DAMODARIND.NS:

cost_of_equity (16.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.92) + 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.