DEEPAKFERT.NS WACC - Weighted Average Cost of Capital

The WACC of Deepak Fertilisers and Petrochemicals Corp Ltd (DEEPAKFERT.NS) is 16.8%.

The Cost of Equity of Deepak Fertilisers and Petrochemicals Corp Ltd (DEEPAKFERT.NS) is 18.85%.

The Cost of Debt of Deepak Fertilisers and Petrochemicals Corp Ltd (DEEPAKFERT.NS) is 10.75%.

	Range	Selected
Cost of equity	17.30% - 20.40%	18.85%
Tax rate	30.70% - 31.40%	31.05%
Cost of debt	8.60% - 12.90%	10.75%
WACC	15.2% - 18.3%	16.8%

WACC

DEEPAKFERT.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.25	1.35

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.30%	20.40%

Tax rate	30.70%	31.40%
Debt/Equity ratio	0.22	0.22
Cost of debt	8.60%	12.90%

After-tax WACC	15.2%	18.3%


Selected WACC	16.8%

DEEPAKFERT.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 DEEPAKFERT.NS:

cost_of_equity (18.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.25) + 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.