ISFT.NS WACC - Weighted Average Cost of Capital

The WACC of Intrasoft Technologies Ltd (ISFT.NS) is 11.5%.

The Cost of Equity of Intrasoft Technologies Ltd (ISFT.NS) is 16.00%.

The Cost of Debt of Intrasoft Technologies Ltd (ISFT.NS) is 6.90%.

	Range	Selected
Cost of equity	13.00% - 19.00%	16.00%
Tax rate	12.70% - 20.70%	16.70%
Cost of debt	5.90% - 7.90%	6.90%
WACC	9.6% - 13.5%	11.5%

WACC

ISFT.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.73	1.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.00%	19.00%

Tax rate	12.70%	20.70%
Debt/Equity ratio	0.77	0.77
Cost of debt	5.90%	7.90%

After-tax WACC	9.6%	13.5%


Selected WACC	11.5%

ISFT.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 ISFT.NS:

cost_of_equity (16.00%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.73) + 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.