IFBAGRO.NS WACC - Weighted Average Cost of Capital

The WACC of IFB Agro Industries Ltd (IFBAGRO.NS) is 13.8%.

The Cost of Equity of IFB Agro Industries Ltd (IFBAGRO.NS) is 13.85%.

The Cost of Debt of IFB Agro Industries Ltd (IFBAGRO.NS) is 20.20%.

	Range	Selected
Cost of equity	12.70% - 15.00%	13.85%
Tax rate	24.60% - 30.90%	27.75%
Cost of debt	7.50% - 32.90%	20.20%
WACC	12.6% - 15.1%	13.8%

WACC

IFBAGRO.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.71	0.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.70%	15.00%

Tax rate	24.60%	30.90%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.50%	32.90%

After-tax WACC	12.6%	15.1%


Selected WACC	13.8%

IFBAGRO.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 IFBAGRO.NS:

cost_of_equity (13.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.71) + 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.