ISEC.NS WACC - Weighted Average Cost of Capital

The WACC of ICICI Securities Ltd (ISEC.NS) is 13.8%.

The Cost of Equity of ICICI Securities Ltd (ISEC.NS) is 16.45%.

The Cost of Debt of ICICI Securities Ltd (ISEC.NS) is 12.35%.

	Range	Selected
Cost of equity	14.40% - 18.50%	16.45%
Tax rate	25.40% - 25.50%	25.45%
Cost of debt	10.50% - 14.20%	12.35%
WACC	12.0% - 15.6%	13.8%

WACC

ISEC.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.9	1.14

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.40%	18.50%

Tax rate	25.40%	25.50%
Debt/Equity ratio	0.58	0.58
Cost of debt	10.50%	14.20%

After-tax WACC	12.0%	15.6%


Selected WACC	13.8%

ISEC.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 ISEC.NS:

cost_of_equity (16.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.9) + 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.