JYOTHYLAB.NS WACC - Weighted Average Cost of Capital

The WACC of Jyothy Labs Ltd (JYOTHYLAB.NS) is 13.7%.

The Cost of Equity of Jyothy Labs Ltd (JYOTHYLAB.NS) is 13.70%.

The Cost of Debt of Jyothy Labs Ltd (JYOTHYLAB.NS) is 5.85%.

	Range	Selected
Cost of equity	11.50% - 15.90%	13.70%
Tax rate	19.00% - 19.50%	19.25%
Cost of debt	4.70% - 7.00%	5.85%
WACC	11.5% - 15.9%	13.7%

WACC

JYOTHYLAB.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.56	0.86

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	15.90%

Tax rate	19.00%	19.50%
Debt/Equity ratio	0	0
Cost of debt	4.70%	7.00%

After-tax WACC	11.5%	15.9%


Selected WACC	13.7%

JYOTHYLAB.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 JYOTHYLAB.NS:

cost_of_equity (13.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.56) + 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.