GODREJIND.NS WACC - Weighted Average Cost of Capital

The WACC of Godrej Industries Ltd (GODREJIND.NS) is 11.3%.

The Cost of Equity of Godrej Industries Ltd (GODREJIND.NS) is 16.40%.

The Cost of Debt of Godrej Industries Ltd (GODREJIND.NS) is 10.45%.

	Range	Selected
Cost of equity	13.30% - 19.50%	16.40%
Tax rate	22.00% - 28.30%	25.15%
Cost of debt	8.80% - 12.10%	10.45%
WACC	9.5% - 13.1%	11.3%

WACC

GODREJIND.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.78	1.25

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.30%	19.50%

Tax rate	22.00%	28.30%
Debt/Equity ratio	1.46	1.46
Cost of debt	8.80%	12.10%

After-tax WACC	9.5%	13.1%


Selected WACC	11.3%

GODREJIND.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 GODREJIND.NS:

cost_of_equity (16.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.78) + 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.