FACT.NS WACC - Weighted Average Cost of Capital

The WACC of Fertilisers And Chemicals Travancore Ltd (FACT.NS) is 15.1%.

The Cost of Equity of Fertilisers And Chemicals Travancore Ltd (FACT.NS) is 15.35%.

The Cost of Debt of Fertilisers And Chemicals Travancore Ltd (FACT.NS) is 5.75%.

	Range	Selected
Cost of equity	11.40% - 19.30%	15.35%
Tax rate	30.00% - 30.00%	30.00%
Cost of debt	4.00% - 7.50%	5.75%
WACC	11.2% - 18.9%	15.1%

WACC

FACT.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.55	1.23

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.40%	19.30%

Tax rate	30.00%	30.00%
Debt/Equity ratio	0.03	0.03
Cost of debt	4.00%	7.50%

After-tax WACC	11.2%	18.9%


Selected WACC	15.1%

FACT.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 FACT.NS:

cost_of_equity (15.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.55) + 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.