GUJALKALI.NS WACC - Weighted Average Cost of Capital

The WACC of Gujarat Alkalies And Chemicals Ltd (GUJALKALI.NS) is 15.3%.

The Cost of Equity of Gujarat Alkalies And Chemicals Ltd (GUJALKALI.NS) is 16.35%.

The Cost of Debt of Gujarat Alkalies And Chemicals Ltd (GUJALKALI.NS) is 10.15%.

	Range	Selected
Cost of equity	14.40% - 18.30%	16.35%
Tax rate	26.10% - 30.50%	28.30%
Cost of debt	4.90% - 15.40%	10.15%
WACC	13.2% - 17.4%	15.3%

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	0.91	1.12

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.40%	18.30%

Tax rate	26.10%	30.50%
Debt/Equity ratio	0.13	0.13
Cost of debt	4.90%	15.40%

After-tax WACC	13.2%	17.4%


Selected WACC	15.3%

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 (16.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.91) + 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.