JCHAC.NS WACC - Weighted Average Cost of Capital

The WACC of Johnson Controls-Hitachi Air Conditioning India Ltd (JCHAC.NS) is 13.7%.

The Cost of Equity of Johnson Controls-Hitachi Air Conditioning India Ltd (JCHAC.NS) is 13.75%.

The Cost of Debt of Johnson Controls-Hitachi Air Conditioning India Ltd (JCHAC.NS) is 7.60%.

	Range	Selected
Cost of equity	12.60% - 14.90%	13.75%
Tax rate	22.90% - 23.60%	23.25%
Cost of debt	7.60% - 7.60%	7.60%
WACC	12.5% - 14.9%	13.7%

WACC

JCHAC.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.68	0.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.60%	14.90%

Tax rate	22.90%	23.60%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.60%	7.60%

After-tax WACC	12.5%	14.9%


Selected WACC	13.7%

JCHAC.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 JCHAC.NS:

cost_of_equity (13.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.68) + 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.