ECLERX.NS WACC - Weighted Average Cost of Capital

The WACC of Eclerx Services Ltd (ECLERX.NS) is 14.0%.

The Cost of Equity of Eclerx Services Ltd (ECLERX.NS) is 14.10%.

The Cost of Debt of Eclerx Services Ltd (ECLERX.NS) is 10.00%.

	Range	Selected
Cost of equity	10.90% - 17.30%	14.10%
Tax rate	25.50% - 25.60%	25.55%
Cost of debt	7.50% - 12.50%	10.00%
WACC	10.8% - 17.1%	14.0%

WACC

ECLERX.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.49	1.01

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.90%	17.30%

Tax rate	25.50%	25.60%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.50%	12.50%

After-tax WACC	10.8%	17.1%


Selected WACC	14.0%

ECLERX.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 ECLERX.NS:

cost_of_equity (14.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.49) + 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.