GNFC.NS WACC - Weighted Average Cost of Capital

The WACC of Gujarat Narmada Valley Fertilizers & Chemicals Ltd (GNFC.NS) is 17.7%.

The Cost of Equity of Gujarat Narmada Valley Fertilizers & Chemicals Ltd (GNFC.NS) is 15.40%.

The Cost of Debt of Gujarat Narmada Valley Fertilizers & Chemicals Ltd (GNFC.NS) is 191.10%.

	Range	Selected
Cost of equity	13.60% - 17.20%	15.40%
Tax rate	25.70% - 25.90%	25.80%
Cost of debt	7.50% - 374.70%	191.10%
WACC	13.5% - 21.9%	17.7%

WACC

GNFC.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.81	1

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.60%	17.20%

Tax rate	25.70%	25.90%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.50%	374.70%

After-tax WACC	13.5%	21.9%


Selected WACC	17.7%

GNFC.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 GNFC.NS:

cost_of_equity (15.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.81) + 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.