DREDGECORP.NS WACC - Weighted Average Cost of Capital

The WACC of Dredging Corporation of India Ltd (DREDGECORP.NS) is 12.3%.

The Cost of Equity of Dredging Corporation of India Ltd (DREDGECORP.NS) is 14.75%.

The Cost of Debt of Dredging Corporation of India Ltd (DREDGECORP.NS) is 5.90%.

	Range	Selected
Cost of equity	12.70% - 16.80%	14.75%
Tax rate	3.40% - 13.30%	8.35%
Cost of debt	4.80% - 7.00%	5.90%
WACC	10.6% - 14.0%	12.3%

WACC

DREDGECORP.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.7	0.96

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.70%	16.80%

Tax rate	3.40%	13.30%
Debt/Equity ratio	0.35	0.35
Cost of debt	4.80%	7.00%

After-tax WACC	10.6%	14.0%


Selected WACC	12.3%

DREDGECORP.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 DREDGECORP.NS:

cost_of_equity (14.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.7) + 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.