GODFRYPHLP.NS WACC - Weighted Average Cost of Capital

The WACC of Godfrey Phillips India Ltd (GODFRYPHLP.NS) is 12.9%.

The Cost of Equity of Godfrey Phillips India Ltd (GODFRYPHLP.NS) is 12.95%.

The Cost of Debt of Godfrey Phillips India Ltd (GODFRYPHLP.NS) is 7.90%.

	Range	Selected
Cost of equity	11.80% - 14.10%	12.95%
Tax rate	22.00% - 22.80%	22.40%
Cost of debt	7.50% - 8.30%	7.90%
WACC	11.7% - 14.1%	12.9%

WACC

GODFRYPHLP.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.59	0.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.80%	14.10%

Tax rate	22.00%	22.80%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.50%	8.30%

After-tax WACC	11.7%	14.1%


Selected WACC	12.9%

GODFRYPHLP.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 GODFRYPHLP.NS:

cost_of_equity (12.95%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.59) + 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.