JSWSTEEL.NS
JSW Steel Ltd
Price:  
1,028.90 
INR
Volume:  
1,941,604.00
India | Metals & Mining
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JSWSTEEL.NS WACC - Weighted Average Cost of Capital

The WACC of JSW Steel Ltd (JSWSTEEL.NS) is 16.4%.

The Cost of Equity of JSW Steel Ltd (JSWSTEEL.NS) is 19.45%.
The Cost of Debt of JSW Steel Ltd (JSWSTEEL.NS) is 11.25%.

Range Selected
Cost of equity 17.80% - 21.10% 19.45%
Tax rate 30.60% - 31.90% 31.25%
Cost of debt 10.40% - 12.10% 11.25%
WACC 15.1% - 17.8% 16.4%
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 1.32 1.43
Additional risk adjustments 0.0% 0.5%
Cost of equity 17.80% 21.10%
Tax rate 30.60% 31.90%
Debt/Equity ratio 0.35 0.35
Cost of debt 10.40% 12.10%
After-tax WACC 15.1% 17.8%
Selected WACC 16.4%

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 (19.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.32) + 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.