EICHERMOT.NS WACC - Weighted Average Cost of Capital

The WACC of Eicher Motors Ltd (EICHERMOT.NS) is 14.9%.

The Cost of Equity of Eicher Motors Ltd (EICHERMOT.NS) is 14.90%.

The Cost of Debt of Eicher Motors Ltd (EICHERMOT.NS) is 9.25%.

	Range	Selected
Cost of equity	12.40% - 17.40%	14.90%
Tax rate	23.20% - 23.50%	23.35%
Cost of debt	7.50% - 11.00%	9.25%
WACC	12.4% - 17.4%	14.9%

WACC

EICHERMOT.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.66	1.02

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.40%	17.40%

Tax rate	23.20%	23.50%
Debt/Equity ratio	0	0
Cost of debt	7.50%	11.00%

After-tax WACC	12.4%	17.4%


Selected WACC	14.9%

EICHERMOT.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 EICHERMOT.NS:

cost_of_equity (14.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.66) + 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.