JISLJALEQS.NS WACC - Weighted Average Cost of Capital

The WACC of Jain Irrigation Systems Ltd (JISLJALEQS.NS) is 15.5%.

The Cost of Equity of Jain Irrigation Systems Ltd (JISLJALEQS.NS) is 24.70%.

The Cost of Debt of Jain Irrigation Systems Ltd (JISLJALEQS.NS) is 10.95%.

	Range	Selected
Cost of equity	20.80% - 28.60%	24.70%
Tax rate	29.30% - 31.90%	30.60%
Cost of debt	6.50% - 15.40%	10.95%
WACC	12.1% - 18.8%	15.5%

WACC

JISLJALEQS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.67	2.22

Additional risk adjustments	0.0%	0.5%
Cost of equity	20.80%	28.60%

Tax rate	29.30%	31.90%
Debt/Equity ratio	1.16	1.16
Cost of debt	6.50%	15.40%

After-tax WACC	12.1%	18.8%


Selected WACC	15.5%

JISLJALEQS.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 JISLJALEQS.NS:

cost_of_equity (24.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.67) + 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.