DOLLAR.NS WACC - Weighted Average Cost of Capital

The WACC of Dollar Industries Ltd (DOLLAR.NS) is 14.3%.

The Cost of Equity of Dollar Industries Ltd (DOLLAR.NS) is 15.65%.

The Cost of Debt of Dollar Industries Ltd (DOLLAR.NS) is 7.80%.

	Range	Selected
Cost of equity	14.40% - 16.90%	15.65%
Tax rate	25.30% - 25.60%	25.45%
Cost of debt	7.50% - 8.10%	7.80%
WACC	13.2% - 15.4%	14.3%

WACC

DOLLAR.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.91	0.97

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.40%	16.90%

Tax rate	25.30%	25.60%
Debt/Equity ratio	0.16	0.16
Cost of debt	7.50%	8.10%

After-tax WACC	13.2%	15.4%


Selected WACC	14.3%

DOLLAR.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 DOLLAR.NS:

cost_of_equity (15.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.91) + 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.