EMAMIPAP.NS WACC - Weighted Average Cost of Capital

The WACC of Emami Paper Mills Ltd (EMAMIPAP.NS) is 13.7%.

The Cost of Equity of Emami Paper Mills Ltd (EMAMIPAP.NS) is 19.75%.

The Cost of Debt of Emami Paper Mills Ltd (EMAMIPAP.NS) is 9.40%.

	Range	Selected
Cost of equity	17.80% - 21.70%	19.75%
Tax rate	23.70% - 25.00%	24.35%
Cost of debt	6.70% - 12.10%	9.40%
WACC	11.7% - 15.7%	13.7%

WACC

EMAMIPAP.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.32	1.49

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.80%	21.70%

Tax rate	23.70%	25.00%
Debt/Equity ratio	0.92	0.92
Cost of debt	6.70%	12.10%

After-tax WACC	11.7%	15.7%


Selected WACC	13.7%

EMAMIPAP.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 EMAMIPAP.NS:

cost_of_equity (19.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.32) + 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.