GUJRAFFIA.NS WACC - Weighted Average Cost of Capital

The WACC of Gujarat Raffia Industries Ltd (GUJRAFFIA.NS) is 12.7%.

The Cost of Equity of Gujarat Raffia Industries Ltd (GUJRAFFIA.NS) is 13.35%.

The Cost of Debt of Gujarat Raffia Industries Ltd (GUJRAFFIA.NS) is 8.55%.

	Range	Selected
Cost of equity	12.30% - 14.40%	13.35%
Tax rate	15.30% - 17.10%	16.20%
Cost of debt	8.10% - 9.00%	8.55%
WACC	11.7% - 13.7%	12.7%

WACC

GUJRAFFIA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.65	0.7

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.30%	14.40%

Tax rate	15.30%	17.10%
Debt/Equity ratio	0.11	0.11
Cost of debt	8.10%	9.00%

After-tax WACC	11.7%	13.7%


Selected WACC	12.7%

GUJRAFFIA.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 GUJRAFFIA.NS:

cost_of_equity (13.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.65) + 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.