GMBREW.NS WACC - Weighted Average Cost of Capital

The WACC of G M Breweries Ltd (GMBREW.NS) is 14.0%.

The Cost of Equity of G M Breweries Ltd (GMBREW.NS) is 22.20%.

The Cost of Debt of G M Breweries Ltd (GMBREW.NS) is 7.50%.

	Range	Selected
Cost of equity	19.00% - 25.40%	22.20%
Tax rate	20.50% - 22.20%	21.35%
Cost of debt	7.50% - 7.50%	7.50%
WACC	12.5% - 15.6%	14.0%

WACC

GMBREW.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.46	1.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	19.00%	25.40%

Tax rate	20.50%	22.20%
Debt/Equity ratio	1	1
Cost of debt	7.50%	7.50%

After-tax WACC	12.5%	15.6%


Selected WACC	14.0%

GMBREW.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 GMBREW.NS:

cost_of_equity (22.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.46) + 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.