GESHIP.NS WACC - Weighted Average Cost of Capital

The WACC of Great Eastern Shipping Company Ltd (GESHIP.NS) is 14.2%.

The Cost of Equity of Great Eastern Shipping Company Ltd (GESHIP.NS) is 15.85%.

The Cost of Debt of Great Eastern Shipping Company Ltd (GESHIP.NS) is 6.90%.

	Range	Selected
Cost of equity	14.40% - 17.30%	15.85%
Tax rate	2.20% - 2.70%	2.45%
Cost of debt	6.20% - 7.60%	6.90%
WACC	12.9% - 15.5%	14.2%

WACC

GESHIP.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.9	1.01

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.40%	17.30%

Tax rate	2.20%	2.70%
Debt/Equity ratio	0.22	0.22
Cost of debt	6.20%	7.60%

After-tax WACC	12.9%	15.5%


Selected WACC	14.2%

GESHIP.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 GESHIP.NS:

cost_of_equity (15.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.9) + 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.