ERIS.NS WACC - Weighted Average Cost of Capital

The WACC of Eris Lifesciences Ltd (ERIS.NS) is 13.0%.

The Cost of Equity of Eris Lifesciences Ltd (ERIS.NS) is 12.80%.

The Cost of Debt of Eris Lifesciences Ltd (ERIS.NS) is 16.65%.

	Range	Selected
Cost of equity	11.70% - 13.90%	12.80%
Tax rate	8.10% - 8.90%	8.50%
Cost of debt	8.60% - 24.70%	16.65%
WACC	11.2% - 14.9%	13.0%

WACC

ERIS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.58	0.65

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.70%	13.90%

Tax rate	8.10%	8.90%
Debt/Equity ratio	0.13	0.13
Cost of debt	8.60%	24.70%

After-tax WACC	11.2%	14.9%


Selected WACC	13.0%

ERIS.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 ERIS.NS:

cost_of_equity (12.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.58) + 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.