GODREJCP.NS WACC - Weighted Average Cost of Capital

The WACC of Godrej Consumer Products Ltd (GODREJCP.NS) is 13.0%.

The Cost of Equity of Godrej Consumer Products Ltd (GODREJCP.NS) is 13.20%.

The Cost of Debt of Godrej Consumer Products Ltd (GODREJCP.NS) is 9.00%.

	Range	Selected
Cost of equity	11.70% - 14.70%	13.20%
Tax rate	18.60% - 19.70%	19.15%
Cost of debt	7.60% - 10.40%	9.00%
WACC	11.5% - 14.5%	13.0%

WACC

GODREJCP.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.58	0.73

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.70%	14.70%

Tax rate	18.60%	19.70%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.60%	10.40%

After-tax WACC	11.5%	14.5%


Selected WACC	13.0%

GODREJCP.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 GODREJCP.NS:

cost_of_equity (13.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.58) + 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.