IRBINVIT.NS WACC - Weighted Average Cost of Capital

The WACC of IRB InvIT Fund (IRBINVIT.NS) is 12.5%.

The Cost of Equity of IRB InvIT Fund (IRBINVIT.NS) is 17.25%.

The Cost of Debt of IRB InvIT Fund (IRBINVIT.NS) is 7.50%.

	Range	Selected
Cost of equity	14.00% - 20.50%	17.25%
Tax rate	0.50% - 0.90%	0.70%
Cost of debt	6.90% - 8.10%	7.50%
WACC	10.5% - 14.4%	12.5%

WACC

IRBINVIT.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	1.35

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.00%	20.50%

Tax rate	0.50%	0.90%
Debt/Equity ratio	0.95	0.95
Cost of debt	6.90%	8.10%

After-tax WACC	10.5%	14.4%


Selected WACC	12.5%

IRBINVIT.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 IRBINVIT.NS:

cost_of_equity (17.25%) = 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.