JSWSTEEL.NS
JSW Steel Ltd
Price:  
993.50 
INR
Volume:  
1,710,817.00
India | Metals & Mining
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JSWSTEEL.NS WACC - Weighted Average Cost of Capital

The WACC of JSW Steel Ltd (JSWSTEEL.NS) is 15.7%.

The Cost of Equity of JSW Steel Ltd (JSWSTEEL.NS) is 18.90%.
The Cost of Debt of JSW Steel Ltd (JSWSTEEL.NS) is 10.40%.

Range Selected
Cost of equity 17.40% - 20.40% 18.90%
Tax rate 31.60% - 33.60% 32.60%
Cost of debt 8.70% - 12.10% 10.40%
WACC 14.4% - 17.1% 15.7%
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 1.27 1.35
Additional risk adjustments 0.0% 0.5%
Cost of equity 17.40% 20.40%
Tax rate 31.60% 33.60%
Debt/Equity ratio 0.36 0.36
Cost of debt 8.70% 12.10%
After-tax WACC 14.4% 17.1%
Selected WACC 15.7%

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 (18.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.27) + 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.