ENERGYDEV.NS WACC - Weighted Average Cost of Capital

The WACC of Energy Development Company Ltd (ENERGYDEV.NS) is 12.5%.

The Cost of Equity of Energy Development Company Ltd (ENERGYDEV.NS) is 19.70%.

The Cost of Debt of Energy Development Company Ltd (ENERGYDEV.NS) is 12.25%.

	Range	Selected
Cost of equity	13.70% - 25.70%	19.70%
Tax rate	25.60% - 32.70%	29.15%
Cost of debt	5.90% - 18.60%	12.25%
WACC	7.8% - 17.3%	12.5%

WACC

ENERGYDEV.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.82	1.92

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.70%	25.70%

Tax rate	25.60%	32.70%
Debt/Equity ratio	1.77	1.77
Cost of debt	5.90%	18.60%

After-tax WACC	7.8%	17.3%


Selected WACC	12.5%

ENERGYDEV.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 ENERGYDEV.NS:

cost_of_equity (19.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.82) + 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.