INSECTICID.NS WACC - Weighted Average Cost of Capital

The WACC of Insecticides (India) Ltd (INSECTICID.NS) is 15.3%.

The Cost of Equity of Insecticides (India) Ltd (INSECTICID.NS) is 15.60%.

The Cost of Debt of Insecticides (India) Ltd (INSECTICID.NS) is 8.90%.

	Range	Selected
Cost of equity	13.90% - 17.30%	15.60%
Tax rate	22.30% - 23.10%	22.70%
Cost of debt	7.50% - 10.30%	8.90%
WACC	13.6% - 16.9%	15.3%

WACC

INSECTICID.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.85	1.02

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.90%	17.30%

Tax rate	22.30%	23.10%
Debt/Equity ratio	0.04	0.04
Cost of debt	7.50%	10.30%

After-tax WACC	13.6%	16.9%


Selected WACC	15.3%

INSECTICID.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 INSECTICID.NS:

cost_of_equity (15.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.85) + 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.