GSS.NS WACC - Weighted Average Cost of Capital

The WACC of GSS Infotech Ltd (GSS.NS) is 12.5%.

The Cost of Equity of GSS Infotech Ltd (GSS.NS) is 13.30%.

The Cost of Debt of GSS Infotech Ltd (GSS.NS) is 6.80%.

	Range	Selected
Cost of equity	11.20% - 15.40%	13.30%
Tax rate	9.40% - 12.60%	11.00%
Cost of debt	6.60% - 7.00%	6.80%
WACC	10.6% - 14.3%	12.5%

WACC

GSS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.52	0.8

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.20%	15.40%

Tax rate	9.40%	12.60%
Debt/Equity ratio	0.12	0.12
Cost of debt	6.60%	7.00%

After-tax WACC	10.6%	14.3%


Selected WACC	12.5%

GSS.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 GSS.NS:

cost_of_equity (13.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.52) + 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.