DCMFINSERV.NS
DCM Financial Services Ltd
Price:  
6.70 
INR
Volume:  
20,811.00
India | Consumer Finance
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DCMFINSERV.NS WACC - Weighted Average Cost of Capital

The WACC of DCM Financial Services Ltd (DCMFINSERV.NS) is 6.6%.

The Cost of Equity of DCM Financial Services Ltd (DCMFINSERV.NS) is 20.60%.
The Cost of Debt of DCM Financial Services Ltd (DCMFINSERV.NS) is 5.00%.

Range Selected
Cost of equity 14.00% - 27.20% 20.60%
Tax rate 30.00% - 30.00% 30.00%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.4% - 7.8% 6.6%
WACC

DCMFINSERV.NS WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.86 2.07
Additional risk adjustments 0.0% 0.5%
Cost of equity 14.00% 27.20%
Tax rate 30.00% 30.00%
Debt/Equity ratio 4.52 4.52
Cost of debt 5.00% 5.00%
After-tax WACC 5.4% 7.8%
Selected WACC 6.6%

DCMFINSERV.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 DCMFINSERV.NS:

cost_of_equity (20.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.86) + 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.