DECCANCE.NS WACC - Weighted Average Cost of Capital

The WACC of Deccan Cements Ltd (DECCANCE.NS) is 12.5%.

The Cost of Equity of Deccan Cements Ltd (DECCANCE.NS) is 15.30%.

The Cost of Debt of Deccan Cements Ltd (DECCANCE.NS) is 8.90%.

	Range	Selected
Cost of equity	13.50% - 17.10%	15.30%
Tax rate	26.00% - 27.60%	26.80%
Cost of debt	5.70% - 12.10%	8.90%
WACC	10.5% - 14.4%	12.5%

WACC

DECCANCE.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.8	1

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.50%	17.10%

Tax rate	26.00%	27.60%
Debt/Equity ratio	0.48	0.48
Cost of debt	5.70%	12.10%

After-tax WACC	10.5%	14.4%


Selected WACC	12.5%

DECCANCE.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 DECCANCE.NS:

cost_of_equity (15.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.8) + 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.