ITC.NS WACC - Weighted Average Cost of Capital
The WACC of ITC Ltd (ITC.NS) is 13.0%.
| Range | Selected | |
| Cost of equity | 11.8% - 14.1% | 12.95% |
| Tax rate | 25.1% - 25.3% | 25.2% |
| Cost of debt | 7.5% - 15.3% | 11.4% |
| WACC | 11.8% - 14.1% | 13.0% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.59 | 0.67 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.8% | 14.1% |
| Tax rate | 25.1% | 25.3% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 7.5% | 15.3% |
| After-tax WACC | 11.8% | 14.1% |
| Selected WACC | 13.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ITC.NS | ITC Ltd | 0 | 0.55 | 0.55 |
| 033780.KS | KT&G Corp | 0.1 | 0.18 | 0.16 |
| 2914.T | Japan Tobacco Inc | 0.19 | 0.56 | 0.49 |
| 526723.BO | NTC Industries Ltd | 0.16 | 1.26 | 1.12 |
| BAT.KL | British American Tobacco (Malaysia) Bhd | 0.33 | 0.54 | 0.43 |
| CLC.VN | Cat Loi JSC | 0.5 | 0.45 | 0.33 |
| GODFRYPHLP.NS | Godfrey Phillips India Ltd | 0.01 | 1.3 | 1.3 |
| GOLDENTOBC.NS | Golden Tobacco Ltd | 0.03 | 0.22 | 0.22 |
| HMSP.JK | Hanjaya Mandala Sampoerna Tbk PT | 0.01 | 0.72 | 0.72 |
| ITIC.JK | Indonesian Tobacco Tbk PT | 0.74 | 0.38 | 0.24 |
| Low | High | |
| Unlevered beta | 0.39 | 0.51 |
| Relevered beta | 0.39 | 0.51 |
| Adjusted relevered beta | 0.59 | 0.67 |
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 (12.95%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.59) + 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.