JSWSTEEL.NS WACC - Weighted Average Cost of Capital

The WACC of JSW Steel Ltd (JSWSTEEL.NS) is 16.3%.

The Cost of Equity of JSW Steel Ltd (JSWSTEEL.NS) is 19.80%.

The Cost of Debt of JSW Steel Ltd (JSWSTEEL.NS) is 10.75%.

	Range	Selected
Cost of equity	18.20% - 21.40%	19.80%
Tax rate	30.60% - 31.90%	31.25%
Cost of debt	9.40% - 12.10%	10.75%
WACC	15.0% - 17.7%	16.3%

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	1.36	1.45

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.20%	21.40%

Tax rate	30.60%	31.90%
Debt/Equity ratio	0.38	0.38
Cost of debt	9.40%	12.10%

After-tax WACC	15.0%	17.7%


Selected WACC	16.3%

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 (19.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.36) + 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.