ELECON.NS WACC - Weighted Average Cost of Capital

The WACC of Elecon Engineering Company Ltd (ELECON.NS) is 17.1%.

The Cost of Equity of Elecon Engineering Company Ltd (ELECON.NS) is 17.30%.

The Cost of Debt of Elecon Engineering Company Ltd (ELECON.NS) is 11.50%.

	Range	Selected
Cost of equity	14.30% - 20.30%	17.30%
Tax rate	21.90% - 23.10%	22.50%
Cost of debt	7.50% - 15.50%	11.50%
WACC	14.1% - 20.1%	17.1%

WACC

ELECON.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.89	1.34

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.30%	20.30%

Tax rate	21.90%	23.10%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.50%	15.50%

After-tax WACC	14.1%	20.1%


Selected WACC	17.1%

ELECON.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 ELECON.NS:

cost_of_equity (17.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.89) + 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.