FCSSOFT.NS WACC - Weighted Average Cost of Capital

The WACC of FCS Software Solutions Ltd (FCSSOFT.NS) is 13.2%.

The Cost of Equity of FCS Software Solutions Ltd (FCSSOFT.NS) is 17.15%.

The Cost of Debt of FCS Software Solutions Ltd (FCSSOFT.NS) is 12.10%.

	Range	Selected
Cost of equity	13.80% - 20.50%	17.15%
Tax rate	18.00% - 28.80%	23.40%
Cost of debt	12.10% - 12.10%	12.10%
WACC	11.9% - 14.6%	13.2%

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	0.84	1.36

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.80%	20.50%

Tax rate	18.00%	28.80%
Debt/Equity ratio	1	1
Cost of debt	12.10%	12.10%

After-tax WACC	11.9%	14.6%


Selected WACC	13.2%

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 (17.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.84) + 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.