JBCHEPHARM.NS WACC - Weighted Average Cost of Capital

The WACC of J B Chemicals and Pharmaceuticals Ltd (JBCHEPHARM.NS) is 12.6%.

The Cost of Equity of J B Chemicals and Pharmaceuticals Ltd (JBCHEPHARM.NS) is 12.65%.

The Cost of Debt of J B Chemicals and Pharmaceuticals Ltd (JBCHEPHARM.NS) is 13.10%.

	Range	Selected
Cost of equity	11.70% - 13.60%	12.65%
Tax rate	25.30% - 25.90%	25.60%
Cost of debt	7.50% - 18.70%	13.10%
WACC	11.6% - 13.6%	12.6%

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	0.58	0.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.70%	13.60%

Tax rate	25.30%	25.90%
Debt/Equity ratio	0	0
Cost of debt	7.50%	18.70%

After-tax WACC	11.6%	13.6%


Selected WACC	12.6%

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 (12.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.58) + 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.