FRETAIL.NS WACC - Weighted Average Cost of Capital

The WACC of Future Retail Ltd (FRETAIL.NS) is 9.5%.

The Cost of Equity of Future Retail Ltd (FRETAIL.NS) is 212.55%.

The Cost of Debt of Future Retail Ltd (FRETAIL.NS) is 10.90%.

	Range	Selected
Cost of equity	121.50% - 303.60%	212.55%
Tax rate	30.00% - 30.00%	30.00%
Cost of debt	7.00% - 14.80%	10.90%
WACC	6.0% - 13.1%	9.5%

WACC

FRETAIL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	13.79	31.77

Additional risk adjustments	0.0%	0.5%
Cost of equity	121.50%	303.60%

Tax rate	30.00%	30.00%
Debt/Equity ratio	106	106
Cost of debt	7.00%	14.80%

After-tax WACC	6.0%	13.1%


Selected WACC	9.5%

FRETAIL.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 FRETAIL.NS:

cost_of_equity (212.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (13.79) + 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.