DEEPAKFERT.NS WACC - Weighted Average Cost of Capital

The WACC of Deepak Fertilisers and Petrochemicals Corp Ltd (DEEPAKFERT.NS) is 14.1%.

The Cost of Equity of Deepak Fertilisers and Petrochemicals Corp Ltd (DEEPAKFERT.NS) is 16.40%.

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

	Range	Selected
Cost of equity	14.50% - 18.30%	16.40%
Tax rate	30.70% - 31.40%	31.05%
Cost of debt	8.60% - 12.90%	10.75%
WACC	12.3% - 15.9%	14.1%

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	0.92	1.12

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.50%	18.30%

Tax rate	30.70%	31.40%
Debt/Equity ratio	0.35	0.35
Cost of debt	8.60%	12.90%

After-tax WACC	12.3%	15.9%


Selected WACC	14.1%

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 (16.40%) = 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.