FORCEMOT.NS WACC - Weighted Average Cost of Capital
The WACC of Force Motors Ltd (FORCEMOT.NS) is 17.9%.
| Range | Selected | |
| Cost of equity | 16.2% - 19.8% | 18% |
| Tax rate | 33.1% - 35.5% | 34.3% |
| Cost of debt | 7.5% - 8.6% | 8.05% |
| WACC | 16.1% - 19.7% | 17.9% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 1.12 | 1.28 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 16.2% | 19.8% |
| Tax rate | 33.1% | 35.5% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 7.5% | 8.6% |
| After-tax WACC | 16.1% | 19.7% |
| Selected WACC | 17.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| FORCEMOT.NS | Force Motors Ltd | 0 | 1.08 | 1.08 |
| 505036.BO | Automobile Corp Of Goa Ltd | 0.07 | 1.16 | 1.11 |
| 531859.BO | Oriental Rail Infrastructure Ltd | 0.28 | 1.34 | 1.14 |
| ACE.NS | Action Construction Equipment Ltd | 0 | 1.2 | 1.2 |
| BEML.NS | BEML Ltd | 0.01 | 1.8 | 1.8 |
| COCHINSHIP.NS | Cochin Shipyard Ltd | 0.01 | 2.03 | 2.01 |
| SMLISUZU.NS | SML Isuzu Ltd | 0.19 | 2 | 1.78 |
| TEXRAIL.NS | Texmaco Rail & Engineering Ltd | 0.12 | 1.68 | 1.55 |
| TIL.NS | TIL Ltd | 0.12 | 1.43 | 1.32 |
| TWL.NS | Titagarh Wagons Ltd | 0.1 | 0.86 | 0.81 |
| Low | High | |
| Unlevered beta | 1.18 | 1.41 |
| Relevered beta | 1.18 | 1.42 |
| Adjusted relevered beta | 1.12 | 1.28 |
FORCEMOT.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 FORCEMOT.NS:
cost_of_equity (18.00%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.12) + 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.