GPPL.NS WACC - Weighted Average Cost of Capital

The WACC of Gujarat Pipavav Port Ltd (GPPL.NS) is 15.4%.

The Cost of Equity of Gujarat Pipavav Port Ltd (GPPL.NS) is 15.50%.

The Cost of Debt of Gujarat Pipavav Port Ltd (GPPL.NS) is 8.30%.

	Range	Selected
Cost of equity	14.20% - 16.80%	15.50%
Tax rate	31.10% - 32.70%	31.90%
Cost of debt	7.00% - 9.60%	8.30%
WACC	14.1% - 16.7%	15.4%

WACC

GPPL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.88	0.96

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.20%	16.80%

Tax rate	31.10%	32.70%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.00%	9.60%

After-tax WACC	14.1%	16.7%


Selected WACC	15.4%

GPPL.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 GPPL.NS:

cost_of_equity (15.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.88) + 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.