GODREJAGRO.NS WACC - Weighted Average Cost of Capital

The WACC of Godrej Agrovet Ltd (GODREJAGRO.NS) is 15.0%.

The Cost of Equity of Godrej Agrovet Ltd (GODREJAGRO.NS) is 15.85%.

The Cost of Debt of Godrej Agrovet Ltd (GODREJAGRO.NS) is 8.20%.

	Range	Selected
Cost of equity	14.40% - 17.30%	15.85%
Tax rate	23.00% - 23.60%	23.30%
Cost of debt	8.10% - 8.30%	8.20%
WACC	13.7% - 16.3%	15.0%

WACC

GODREJAGRO.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.91	1.02

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

Tax rate	23.00%	23.60%
Debt/Equity ratio	0.1	0.1
Cost of debt	8.10%	8.30%

After-tax WACC	13.7%	16.3%


Selected WACC	15.0%

GODREJAGRO.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 GODREJAGRO.NS:

cost_of_equity (15.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.91) + 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.