IMFA.NS WACC - Weighted Average Cost of Capital

The WACC of Indian Metals and Ferro Alloys Ltd (IMFA.NS) is 16.2%.

The Cost of Equity of Indian Metals and Ferro Alloys Ltd (IMFA.NS) is 17.70%.

The Cost of Debt of Indian Metals and Ferro Alloys Ltd (IMFA.NS) is 9.25%.

	Range	Selected
Cost of equity	16.00% - 19.40%	17.70%
Tax rate	25.10% - 27.80%	26.45%
Cost of debt	7.50% - 11.00%	9.25%
WACC	14.5% - 17.8%	16.2%

WACC

IMFA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.1	1.24

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.00%	19.40%

Tax rate	25.10%	27.80%
Debt/Equity ratio	0.16	0.16
Cost of debt	7.50%	11.00%

After-tax WACC	14.5%	17.8%


Selected WACC	16.2%

IMFA.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 IMFA.NS:

cost_of_equity (17.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.1) + 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.