DIVISLAB.NS WACC - Weighted Average Cost of Capital
The WACC of Divi's Laboratories Ltd (DIVISLAB.NS) is 13.3%.
| Range | Selected | |
| Cost of equity | 11.2% - 15.4% | 13.3% |
| Tax rate | 24.0% - 25.0% | 24.5% |
| Cost of debt | 7.5% - 30.8% | 19.15% |
| WACC | 11.2% - 15.4% | 13.3% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.52 | 0.81 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.2% | 15.4% |
| Tax rate | 24.0% | 25.0% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 7.5% | 30.8% |
| After-tax WACC | 11.2% | 15.4% |
| Selected WACC | 13.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| DIVISLAB.NS | Divi's Laboratories Ltd | 0 | 0.73 | 0.73 |
| 043090.KQ | Cube&Company Co Ltd | 1.21 | -0.63 | -0.33 |
| 087010.KQ | Peptron Inc | 0 | -0.43 | -0.42 |
| 206650.KQ | EuBiologics Co Ltd | 0.03 | 0.16 | 0.16 |
| 300463.SZ | Maccura Biotechnology Co Ltd | 0.1 | 1.35 | 1.25 |
| 526853.BO | Bilcare Ltd | 4.05 | 1.46 | 0.36 |
| BROOKS.NS | Brooks Laboratories Ltd | 0.01 | 1.64 | 1.62 |
| DCAL.NS | Dishman Carbogen Amcis Ltd | 0.56 | 1.25 | 0.88 |
| MEM.AX | Memphasys Ltd | 0.48 | 0.22 | 0.16 |
| SYNGENE.NS | Syngene International Ltd | 0.02 | 0.71 | 0.7 |
| Low | High | |
| Unlevered beta | 0.28 | 0.71 |
| Relevered beta | 0.28 | 0.72 |
| Adjusted relevered beta | 0.52 | 0.81 |
DIVISLAB.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 DIVISLAB.NS:
cost_of_equity (13.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.52) + 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.