IRCON.NS WACC - Weighted Average Cost of Capital

The WACC of Ircon International Ltd (IRCON.NS) is 11.8%.

The Cost of Equity of Ircon International Ltd (IRCON.NS) is 13.25%.

The Cost of Debt of Ircon International Ltd (IRCON.NS) is 10.00%.

	Range	Selected
Cost of equity	12.00% - 14.50%	13.25%
Tax rate	19.10% - 24.00%	21.55%
Cost of debt	8.60% - 11.40%	10.00%
WACC	10.6% - 12.9%	11.8%

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	0.62	0.71

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.00%	14.50%

Tax rate	19.10%	24.00%
Debt/Equity ratio	0.38	0.38
Cost of debt	8.60%	11.40%

After-tax WACC	10.6%	12.9%


Selected WACC	11.8%

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 (13.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.62) + 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.