INDOCO.NS WACC - Weighted Average Cost of Capital

The WACC of Indoco Remedies Ltd (INDOCO.NS) is 13.9%.

The Cost of Equity of Indoco Remedies Ltd (INDOCO.NS) is 15.50%.

The Cost of Debt of Indoco Remedies Ltd (INDOCO.NS) is 9.65%.

	Range	Selected
Cost of equity	14.00% - 17.00%	15.50%
Tax rate	27.60% - 29.00%	28.30%
Cost of debt	7.00% - 12.30%	9.65%
WACC	12.3% - 15.4%	13.9%

WACC

INDOCO.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.86	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.00%	17.00%

Tax rate	27.60%	29.00%
Debt/Equity ratio	0.24	0.24
Cost of debt	7.00%	12.30%

After-tax WACC	12.3%	15.4%


Selected WACC	13.9%

INDOCO.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 INDOCO.NS:

cost_of_equity (15.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.86) + 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.