EIDPARRY.NS WACC - Weighted Average Cost of Capital

The WACC of E.I.D-Parry (India) Ltd (EIDPARRY.NS) is 15.8%.

The Cost of Equity of E.I.D-Parry (India) Ltd (EIDPARRY.NS) is 16.80%.

The Cost of Debt of E.I.D-Parry (India) Ltd (EIDPARRY.NS) is 10.20%.

	Range	Selected
Cost of equity	15.50% - 18.10%	16.80%
Tax rate	27.70% - 29.20%	28.45%
Cost of debt	7.80% - 12.60%	10.20%
WACC	14.5% - 17.1%	15.8%

WACC

EIDPARRY.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.04	1.09

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.50%	18.10%

Tax rate	27.70%	29.20%
Debt/Equity ratio	0.12	0.12
Cost of debt	7.80%	12.60%

After-tax WACC	14.5%	17.1%


Selected WACC	15.8%

EIDPARRY.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 EIDPARRY.NS:

cost_of_equity (16.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.04) + 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.