GUJRAFFIA.NS WACC - Weighted Average Cost of Capital

The WACC of Gujarat Raffia Industries Ltd (GUJRAFFIA.NS) is 12.3%.

The Cost of Equity of Gujarat Raffia Industries Ltd (GUJRAFFIA.NS) is 13.05%.

The Cost of Debt of Gujarat Raffia Industries Ltd (GUJRAFFIA.NS) is 9.60%.

	Range	Selected
Cost of equity	11.50% - 14.60%	13.05%
Tax rate	17.30% - 19.30%	18.30%
Cost of debt	9.10% - 10.10%	9.60%
WACC	10.9% - 13.6%	12.3%

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	0.55	0.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	14.60%

Tax rate	17.30%	19.30%
Debt/Equity ratio	0.17	0.17
Cost of debt	9.10%	10.10%

After-tax WACC	10.9%	13.6%


Selected WACC	12.3%

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 (13.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.55) + 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.