IDEA.NS WACC - Weighted Average Cost of Capital

The WACC of Vodafone Idea Ltd (IDEA.NS) is 11.6%.

The Cost of Equity of Vodafone Idea Ltd (IDEA.NS) is 20.35%.

The Cost of Debt of Vodafone Idea Ltd (IDEA.NS) is 5.50%.

	Range	Selected
Cost of equity	18.60% - 22.10%	20.35%
Tax rate	-% - -%	-%
Cost of debt	4.00% - 7.00%	5.50%
WACC	10.0% - 13.2%	11.6%

WACC

IDEA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.41	1.53

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.60%	22.10%

Tax rate	-%	-%
Debt/Equity ratio	1.44	1.44
Cost of debt	4.00%	7.00%

After-tax WACC	10.0%	13.2%


Selected WACC	11.6%

IDEA.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 IDEA.NS:

cost_of_equity (20.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.41) + 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.