JSWSTEEL.NS WACC - Weighted Average Cost of Capital

The WACC of JSW Steel Ltd (JSWSTEEL.NS) is 13.6%.

The Cost of Equity of JSW Steel Ltd (JSWSTEEL.NS) is 16.35%.

The Cost of Debt of JSW Steel Ltd (JSWSTEEL.NS) is 9.65%.

	Range	Selected
Cost of equity	15.10% - 17.60%	16.35%
Tax rate	28.50% - 30.30%	29.40%
Cost of debt	9.30% - 10.00%	9.65%
WACC	12.6% - 14.5%	13.6%

WACC

JSWSTEEL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.99	1.05

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.10%	17.60%

Tax rate	28.50%	30.30%
Debt/Equity ratio	0.41	0.41
Cost of debt	9.30%	10.00%

After-tax WACC	12.6%	14.5%


Selected WACC	13.6%

JSWSTEEL.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 JSWSTEEL.NS:

cost_of_equity (16.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.99) + 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.