GODREJPROP.NS WACC - Weighted Average Cost of Capital

The WACC of Godrej Properties Ltd (GODREJPROP.NS) is 15.5%.

The Cost of Equity of Godrej Properties Ltd (GODREJPROP.NS) is 16.55%.

The Cost of Debt of Godrej Properties Ltd (GODREJPROP.NS) is 12.65%.

	Range	Selected
Cost of equity	13.80% - 19.30%	16.55%
Tax rate	24.00% - 28.00%	26.00%
Cost of debt	12.10% - 13.20%	12.65%
WACC	13.2% - 17.9%	15.5%

WACC

GODREJPROP.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.84	1.22

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.80%	19.30%

Tax rate	24.00%	28.00%
Debt/Equity ratio	0.16	0.16
Cost of debt	12.10%	13.20%

After-tax WACC	13.2%	17.9%


Selected WACC	15.5%

GODREJPROP.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 GODREJPROP.NS:

cost_of_equity (16.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.84) + 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.