GUJGASLTD.NS WACC - Weighted Average Cost of Capital

The WACC of Gujarat Gas Ltd (GUJGASLTD.NS) is 14.3%.

The Cost of Equity of Gujarat Gas Ltd (GUJGASLTD.NS) is 14.30%.

The Cost of Debt of Gujarat Gas Ltd (GUJGASLTD.NS) is 7.55%.

	Range	Selected
Cost of equity	12.50% - 16.10%	14.30%
Tax rate	25.10% - 25.30%	25.20%
Cost of debt	7.50% - 7.60%	7.55%
WACC	12.5% - 16.0%	14.3%

WACC

GUJGASLTD.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.68	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.50%	16.10%

Tax rate	25.10%	25.30%
Debt/Equity ratio	0	0
Cost of debt	7.50%	7.60%

After-tax WACC	12.5%	16.0%


Selected WACC	14.3%

GUJGASLTD.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 GUJGASLTD.NS:

cost_of_equity (14.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.68) + 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.