FINCABLES.NS WACC - Weighted Average Cost of Capital

The WACC of Finolex Cables Ltd (FINCABLES.NS) is 18.5%.

The Cost of Equity of Finolex Cables Ltd (FINCABLES.NS) is 18.45%.

The Cost of Debt of Finolex Cables Ltd (FINCABLES.NS) is 10.85%.

	Range	Selected
Cost of equity	16.80% - 20.10%	18.45%
Tax rate	24.30% - 25.30%	24.80%
Cost of debt	7.50% - 14.20%	10.85%
WACC	16.8% - 20.1%	18.5%

WACC

FINCABLES.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.2	1.32

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.80%	20.10%

Tax rate	24.30%	25.30%
Debt/Equity ratio	0	0
Cost of debt	7.50%	14.20%

After-tax WACC	16.8%	20.1%


Selected WACC	18.5%

FINCABLES.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 FINCABLES.NS:

cost_of_equity (18.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.2) + 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.