GIPCL.NS WACC - Weighted Average Cost of Capital

The WACC of Gujarat Industries Power Company Ltd (GIPCL.NS) is 13.6%.

The Cost of Equity of Gujarat Industries Power Company Ltd (GIPCL.NS) is 15.25%.

The Cost of Debt of Gujarat Industries Power Company Ltd (GIPCL.NS) is 7.20%.

	Range	Selected
Cost of equity	13.80% - 16.70%	15.25%
Tax rate	23.90% - 27.60%	25.75%
Cost of debt	6.60% - 7.80%	7.20%
WACC	12.3% - 14.8%	13.6%

WACC

GIPCL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.84	0.95

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.80%	16.70%

Tax rate	23.90%	27.60%
Debt/Equity ratio	0.2	0.2
Cost of debt	6.60%	7.80%

After-tax WACC	12.3%	14.8%


Selected WACC	13.6%

GIPCL.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 GIPCL.NS:

cost_of_equity (15.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.84) + 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.