IIFLSEC.NS WACC - Weighted Average Cost of Capital

The WACC of IIFL Securities Ltd (IIFLSEC.NS) is 14.4%.

The Cost of Equity of IIFL Securities Ltd (IIFLSEC.NS) is 14.85%.

The Cost of Debt of IIFL Securities Ltd (IIFLSEC.NS) is 13.90%.

	Range	Selected
Cost of equity	13.40% - 16.30%	14.85%
Tax rate	23.40% - 24.30%	23.85%
Cost of debt	7.90% - 19.90%	13.90%
WACC	12.7% - 16.2%	14.4%

WACC

IIFLSEC.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.79	0.9

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.40%	16.30%

Tax rate	23.40%	24.30%
Debt/Equity ratio	0.11	0.11
Cost of debt	7.90%	19.90%

After-tax WACC	12.7%	16.2%


Selected WACC	14.4%

IIFLSEC.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 IIFLSEC.NS:

cost_of_equity (14.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.79) + 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.