FCSSOFT.NS WACC - Weighted Average Cost of Capital

The WACC of FCS Software Solutions Ltd (FCSSOFT.NS) is 14.8%.

The Cost of Equity of FCS Software Solutions Ltd (FCSSOFT.NS) is 15.25%.

The Cost of Debt of FCS Software Solutions Ltd (FCSSOFT.NS) is 18.60%.

	Range	Selected
Cost of equity	11.20% - 19.30%	15.25%
Tax rate	18.00% - 28.80%	23.40%
Cost of debt	18.60% - 18.60%	18.60%
WACC	13.3% - 16.3%	14.8%

WACC

FCSSOFT.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.53	1.22

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.20%	19.30%

Tax rate	18.00%	28.80%
Debt/Equity ratio	1	1
Cost of debt	18.60%	18.60%

After-tax WACC	13.3%	16.3%


Selected WACC	14.8%

FCSSOFT.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 FCSSOFT.NS:

cost_of_equity (15.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.53) + 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.