JPASSOCIAT.NS WACC - Weighted Average Cost of Capital

The WACC of Jaiprakash Associates Ltd (JPASSOCIAT.NS) is 12.2%.

The Cost of Equity of Jaiprakash Associates Ltd (JPASSOCIAT.NS) is 142.85%.

The Cost of Debt of Jaiprakash Associates Ltd (JPASSOCIAT.NS) is 5.50%.

	Range	Selected
Cost of equity	115.60% - 170.10%	142.85%
Tax rate	3.00% - 4.50%	3.75%
Cost of debt	4.00% - 7.00%	5.50%
WACC	9.5% - 14.9%	12.2%

WACC

JPASSOCIAT.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	13.09	17.42

Additional risk adjustments	0.0%	0.5%
Cost of equity	115.60%	170.10%

Tax rate	3.00%	4.50%
Debt/Equity ratio	18.85	18.85
Cost of debt	4.00%	7.00%

After-tax WACC	9.5%	14.9%


Selected WACC	12.2%

JPASSOCIAT.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 JPASSOCIAT.NS:

cost_of_equity (142.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (13.09) + 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.