EMBASSY.NS WACC - Weighted Average Cost of Capital

The WACC of Embassy Office Parks REIT (EMBASSY.NS) is 11.0%.

The Cost of Equity of Embassy Office Parks REIT (EMBASSY.NS) is 12.35%.

The Cost of Debt of Embassy Office Parks REIT (EMBASSY.NS) is 9.75%.

	Range	Selected
Cost of equity	10.80% - 13.90%	12.35%
Tax rate	9.80% - 16.30%	13.05%
Cost of debt	7.40% - 12.10%	9.75%
WACC	9.4% - 12.7%	11.0%

WACC

EMBASSY.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.47	0.65

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.80%	13.90%

Tax rate	9.80%	16.30%
Debt/Equity ratio	0.49	0.49
Cost of debt	7.40%	12.10%

After-tax WACC	9.4%	12.7%


Selected WACC	11.0%

EMBASSY.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 EMBASSY.NS:

cost_of_equity (12.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.47) + 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.