GODREJIND.NS WACC - Weighted Average Cost of Capital

The WACC of Godrej Industries Ltd (GODREJIND.NS) is 11.1%.

The Cost of Equity of Godrej Industries Ltd (GODREJIND.NS) is 13.40%.

The Cost of Debt of Godrej Industries Ltd (GODREJIND.NS) is 11.95%.

	Range	Selected
Cost of equity	10.10% - 16.70%	13.40%
Tax rate	27.10% - 32.70%	29.90%
Cost of debt	8.50% - 15.40%	11.95%
WACC	8.4% - 13.9%	11.1%

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	0.39	0.95

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.10%	16.70%

Tax rate	27.10%	32.70%
Debt/Equity ratio	0.8	0.8
Cost of debt	8.50%	15.40%

After-tax WACC	8.4%	13.9%


Selected WACC	11.1%

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 (13.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.39) + 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.