GUJALKALI.NS WACC - Weighted Average Cost of Capital

The WACC of Gujarat Alkalies And Chemicals Ltd (GUJALKALI.NS) is 14.6%.

The Cost of Equity of Gujarat Alkalies And Chemicals Ltd (GUJALKALI.NS) is 15.90%.

The Cost of Debt of Gujarat Alkalies And Chemicals Ltd (GUJALKALI.NS) is 5.50%.

	Range	Selected
Cost of equity	14.30% - 17.50%	15.90%
Tax rate	31.10% - 32.30%	31.70%
Cost of debt	4.00% - 7.00%	5.50%
WACC	13.1% - 16.1%	14.6%

WACC

GUJALKALI.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.9	1.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.30%	17.50%

Tax rate	31.10%	32.30%
Debt/Equity ratio	0.12	0.12
Cost of debt	4.00%	7.00%

After-tax WACC	13.1%	16.1%


Selected WACC	14.6%

GUJALKALI.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 GUJALKALI.NS:

cost_of_equity (15.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.9) + 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.