GRASIM.NS WACC - Weighted Average Cost of Capital

The WACC of Grasim Industries Ltd (GRASIM.NS) is 11.1%.

The Cost of Equity of Grasim Industries Ltd (GRASIM.NS) is 17.65%.

The Cost of Debt of Grasim Industries Ltd (GRASIM.NS) is 5.90%.

	Range	Selected
Cost of equity	15.90% - 19.40%	17.65%
Tax rate	26.40% - 27.90%	27.15%
Cost of debt	4.00% - 7.80%	5.90%
WACC	9.5% - 12.6%	11.1%

WACC

GRASIM.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.09	1.24

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.90%	19.40%

Tax rate	26.40%	27.90%
Debt/Equity ratio	0.96	0.96
Cost of debt	4.00%	7.80%

After-tax WACC	9.5%	12.6%


Selected WACC	11.1%

GRASIM.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 GRASIM.NS:

cost_of_equity (17.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.09) + 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.