ELGIRUBCO.NS WACC - Weighted Average Cost of Capital

The WACC of ELGI Rubber Co Ltd (ELGIRUBCO.NS) is 16.1%.

The Cost of Equity of ELGI Rubber Co Ltd (ELGIRUBCO.NS) is 19.65%.

The Cost of Debt of ELGI Rubber Co Ltd (ELGIRUBCO.NS) is 15.85%.

	Range	Selected
Cost of equity	17.10% - 22.20%	19.65%
Tax rate	10.90% - 22.10%	16.50%
Cost of debt	7.80% - 23.90%	15.85%
WACC	11.8% - 20.3%	16.1%

WACC

ELGIRUBCO.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.23	1.54

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.10%	22.20%

Tax rate	10.90%	22.10%
Debt/Equity ratio	1.08	1.08
Cost of debt	7.80%	23.90%

After-tax WACC	11.8%	20.3%


Selected WACC	16.1%

ELGIRUBCO.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 ELGIRUBCO.NS:

cost_of_equity (19.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.23) + 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.