EDELWEISS.NS WACC - Weighted Average Cost of Capital

The WACC of Edelweiss Financial Services Ltd (EDELWEISS.NS) is 9.7%.

The Cost of Equity of Edelweiss Financial Services Ltd (EDELWEISS.NS) is 20.40%.

The Cost of Debt of Edelweiss Financial Services Ltd (EDELWEISS.NS) is 6.55%.

	Range	Selected
Cost of equity	16.50% - 24.30%	20.40%
Tax rate	12.90% - 18.50%	15.70%
Cost of debt	4.00% - 9.10%	6.55%
WACC	7.2% - 12.2%	9.7%

WACC

EDELWEISS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.16	1.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.50%	24.30%

Tax rate	12.90%	18.50%
Debt/Equity ratio	2.55	2.55
Cost of debt	4.00%	9.10%

After-tax WACC	7.2%	12.2%


Selected WACC	9.7%

EDELWEISS.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 EDELWEISS.NS:

cost_of_equity (20.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.16) + 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.