JBCHEPHARM.NS
J B Chemicals and Pharmaceuticals Ltd
Price:  
1,684.00 
INR
Volume:  
101,214.00
India | Pharmaceuticals
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JBCHEPHARM.NS WACC - Weighted Average Cost of Capital

The WACC of J B Chemicals and Pharmaceuticals Ltd (JBCHEPHARM.NS) is 14.9%.

The Cost of Equity of J B Chemicals and Pharmaceuticals Ltd (JBCHEPHARM.NS) is 14.80%.
The Cost of Debt of J B Chemicals and Pharmaceuticals Ltd (JBCHEPHARM.NS) is 23.90%.

Range Selected
Cost of equity 13.50% - 16.10% 14.80%
Tax rate 25.30% - 25.90% 25.60%
Cost of debt 7.50% - 40.30% 23.90%
WACC 13.4% - 16.3% 14.9%
WACC

JBCHEPHARM.NS WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.8 0.89
Additional risk adjustments 0.0% 0.5%
Cost of equity 13.50% 16.10%
Tax rate 25.30% 25.90%
Debt/Equity ratio 0.01 0.01
Cost of debt 7.50% 40.30%
After-tax WACC 13.4% 16.3%
Selected WACC 14.9%

JBCHEPHARM.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 JBCHEPHARM.NS:

cost_of_equity (14.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.8) + 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.