IRCON.NS WACC - Weighted Average Cost of Capital

The WACC of Ircon International Ltd (IRCON.NS) is 12.5%.

The Cost of Equity of Ircon International Ltd (IRCON.NS) is 13.55%.

The Cost of Debt of Ircon International Ltd (IRCON.NS) is 8.50%.

	Range	Selected
Cost of equity	11.30% - 15.80%	13.55%
Tax rate	18.70% - 23.60%	21.15%
Cost of debt	8.10% - 8.90%	8.50%
WACC	10.6% - 14.4%	12.5%

WACC

IRCON.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.53	0.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.30%	15.80%

Tax rate	18.70%	23.60%
Debt/Equity ratio	0.19	0.19
Cost of debt	8.10%	8.90%

After-tax WACC	10.6%	14.4%


Selected WACC	12.5%

IRCON.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 IRCON.NS:

cost_of_equity (13.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.53) + 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.