FSL.NS WACC - Weighted Average Cost of Capital

The WACC of Firstsource Solutions Ltd (FSL.NS) is 14.9%.

The Cost of Equity of Firstsource Solutions Ltd (FSL.NS) is 15.80%.

The Cost of Debt of Firstsource Solutions Ltd (FSL.NS) is 7.40%.

	Range	Selected
Cost of equity	12.90% - 18.70%	15.80%
Tax rate	16.90% - 17.60%	17.25%
Cost of debt	6.70% - 8.10%	7.40%
WACC	12.2% - 17.6%	14.9%

WACC

FSL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.72	1.16

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.90%	18.70%

Tax rate	16.90%	17.60%
Debt/Equity ratio	0.1	0.1
Cost of debt	6.70%	8.10%

After-tax WACC	12.2%	17.6%


Selected WACC	14.9%

FSL.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 FSL.NS:

cost_of_equity (15.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.72) + 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.