INSECTICID.NS WACC - Weighted Average Cost of Capital

The WACC of Insecticides (India) Ltd (INSECTICID.NS) is 16.8%.

The Cost of Equity of Insecticides (India) Ltd (INSECTICID.NS) is 17.10%.

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

	Range	Selected
Cost of equity	15.30% - 18.90%	17.10%
Tax rate	23.40% - 24.20%	23.80%
Cost of debt	7.50% - 10.30%	8.90%
WACC	15.0% - 18.5%	16.8%

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	1.02	1.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.30%	18.90%

Tax rate	23.40%	24.20%
Debt/Equity ratio	0.03	0.03
Cost of debt	7.50%	10.30%

After-tax WACC	15.0%	18.5%


Selected WACC	16.8%

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 (17.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.02) + 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.