GOODYEAR.NS WACC - Weighted Average Cost of Capital

The WACC of Goodyear India Ltd (GOODYEAR.NS) is 13.8%.

The Cost of Equity of Goodyear India Ltd (GOODYEAR.NS) is 13.80%.

The Cost of Debt of Goodyear India Ltd (GOODYEAR.NS) is 7.90%.

	Range	Selected
Cost of equity	12.30% - 15.30%	13.80%
Tax rate	25.70% - 25.70%	25.70%
Cost of debt	7.90% - 7.90%	7.90%
WACC	12.3% - 15.3%	13.8%

WACC

GOODYEAR.NS WACC calculation

Category	Low	High

Long-term bond rate	7.2%	7.7%
Equity market risk premium	8.8%	9.8%
Adjusted beta	0.58	0.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.30%	15.30%

Tax rate	25.70%	25.70%
Debt/Equity ratio	0	0
Cost of debt	7.90%	7.90%

After-tax WACC	12.3%	15.3%


Selected WACC	13.8%

GOODYEAR.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 GOODYEAR.NS:

cost_of_equity (13.80%) = risk_free_rate (7.45%) + equity_risk_premium (9.30%) * 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.