FORCEMOT.NS WACC - Weighted Average Cost of Capital

The WACC of Force Motors Ltd (FORCEMOT.NS) is 17.2%.

The Cost of Equity of Force Motors Ltd (FORCEMOT.NS) is 17.65%.

The Cost of Debt of Force Motors Ltd (FORCEMOT.NS) is 8.05%.

	Range	Selected
Cost of equity	16.10% - 19.20%	17.65%
Tax rate	33.10% - 35.50%	34.30%
Cost of debt	7.50% - 8.60%	8.05%
WACC	15.7% - 18.7%	17.2%

WACC

FORCEMOT.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.11	1.22

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.10%	19.20%

Tax rate	33.10%	35.50%
Debt/Equity ratio	0.04	0.04
Cost of debt	7.50%	8.60%

After-tax WACC	15.7%	18.7%


Selected WACC	17.2%

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 (17.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.11) + 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.