JSWENERGY.NS WACC - Weighted Average Cost of Capital

The WACC of JSW Energy Ltd (JSWENERGY.NS) is 13.1%.

The Cost of Equity of JSW Energy Ltd (JSWENERGY.NS) is 14.65%.

The Cost of Debt of JSW Energy Ltd (JSWENERGY.NS) is 10.90%.

	Range	Selected
Cost of equity	11.90% - 17.40%	14.65%
Tax rate	21.40% - 22.80%	22.10%
Cost of debt	9.70% - 12.10%	10.90%
WACC	10.8% - 15.4%	13.1%

WACC

JSWENERGY.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.61	1.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.90%	17.40%

Tax rate	21.40%	22.80%
Debt/Equity ratio	0.34	0.34
Cost of debt	9.70%	12.10%

After-tax WACC	10.8%	15.4%


Selected WACC	13.1%

JSWENERGY.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 JSWENERGY.NS:

cost_of_equity (14.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.61) + 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.