GODREJPROP.NS WACC - Weighted Average Cost of Capital

The WACC of Godrej Properties Ltd (GODREJPROP.NS) is 15.2%.

The Cost of Equity of Godrej Properties Ltd (GODREJPROP.NS) is 16.25%.

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

	Range	Selected
Cost of equity	13.60% - 18.90%	16.25%
Tax rate	24.00% - 28.00%	26.00%
Cost of debt	12.10% - 13.20%	12.65%
WACC	13.0% - 17.5%	15.2%

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	0.81	1.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.60%	18.90%

Tax rate	24.00%	28.00%
Debt/Equity ratio	0.18	0.18
Cost of debt	12.10%	13.20%

After-tax WACC	13.0%	17.5%


Selected WACC	15.2%

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 (16.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.81) + 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.