JKTYRE.NS WACC - Weighted Average Cost of Capital

The WACC of JK Tyre & Industries Ltd (JKTYRE.NS) is 13.4%.

The Cost of Equity of JK Tyre & Industries Ltd (JKTYRE.NS) is 16.80%.

The Cost of Debt of JK Tyre & Industries Ltd (JKTYRE.NS) is 9.65%.

	Range	Selected
Cost of equity	14.70% - 18.90%	16.80%
Tax rate	33.40% - 34.30%	33.85%
Cost of debt	9.30% - 10.00%	9.65%
WACC	11.9% - 14.9%	13.4%

WACC

JKTYRE.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.94	1.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.70%	18.90%

Tax rate	33.40%	34.30%
Debt/Equity ratio	0.48	0.48
Cost of debt	9.30%	10.00%

After-tax WACC	11.9%	14.9%


Selected WACC	13.4%

JKTYRE.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 JKTYRE.NS:

cost_of_equity (16.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.94) + 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.