ITC.NS WACC - Weighted Average Cost of Capital

The WACC of ITC Ltd (ITC.NS) is 14.1%.

The Cost of Equity of ITC Ltd (ITC.NS) is 14.10%.

The Cost of Debt of ITC Ltd (ITC.NS) is 11.80%.

	Range	Selected
Cost of equity	12.80% - 15.40%	14.10%
Tax rate	25.10% - 25.30%	25.20%
Cost of debt	7.50% - 16.10%	11.80%
WACC	12.8% - 15.4%	14.1%

WACC

ITC.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.72	0.81

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.80%	15.40%

Tax rate	25.10%	25.30%
Debt/Equity ratio	0	0
Cost of debt	7.50%	16.10%

After-tax WACC	12.8%	15.4%


Selected WACC	14.1%

ITC.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 ITC.NS:

cost_of_equity (14.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.72) + 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.