JYOTHYLAB.NS WACC - Weighted Average Cost of Capital

The WACC of Jyothy Labs Ltd (JYOTHYLAB.NS) is 12.6%.

The Cost of Equity of Jyothy Labs Ltd (JYOTHYLAB.NS) is 12.70%.

The Cost of Debt of Jyothy Labs Ltd (JYOTHYLAB.NS) is 7.00%.

	Range	Selected
Cost of equity	11.80% - 13.60%	12.70%
Tax rate	21.70% - 23.40%	22.55%
Cost of debt	6.50% - 7.50%	7.00%
WACC	11.7% - 13.5%	12.6%

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	0.59	0.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.80%	13.60%

Tax rate	21.70%	23.40%
Debt/Equity ratio	0.01	0.01
Cost of debt	6.50%	7.50%

After-tax WACC	11.7%	13.5%


Selected WACC	12.6%

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 (12.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.59) + 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.