G
Genpact Ltd
Price:  
45.92 
USD
Volume:  
1,088,830
Bermuda | IT Services

Genpact WACC - Weighted Average Cost of Capital

The WACC of Genpact Ltd (G) is 7.0%.

The Cost of Equity of Genpact Ltd (G) is 7.65%.
The Cost of Debt of Genpact Ltd (G) is 4.3%.

RangeSelected
Cost of equity6.3% - 9.0%7.65%
Tax rate23.3% - 23.7%23.5%
Cost of debt4.0% - 4.6%4.3%
WACC5.9% - 8.2%7.0%
WACC

Genpact WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.530.74
Additional risk adjustments0.0%0.5%
Cost of equity6.3%9.0%
Tax rate23.3%23.7%
Debt/Equity ratio
0.160.16
Cost of debt4.0%4.6%
After-tax WACC5.9%8.2%
Selected WACC7.0%

Genpact'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 Genpact:

cost_of_equity (7.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.53) + 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.