KANORICHEM.NS WACC - Weighted Average Cost of Capital

The WACC of Kanoria Chemicals and Industries Ltd (KANORICHEM.NS) is 11.7%.

The Cost of Equity of Kanoria Chemicals and Industries Ltd (KANORICHEM.NS) is 21.20%.

The Cost of Debt of Kanoria Chemicals and Industries Ltd (KANORICHEM.NS) is 6.55%.

	Range	Selected
Cost of equity	19.40% - 23.00%	21.20%
Tax rate	34.80% - 45.70%	40.25%
Cost of debt	6.10% - 7.00%	6.55%
WACC	11.0% - 12.5%	11.7%

WACC

KANORICHEM.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.51	1.63

Additional risk adjustments	0.0%	0.5%
Cost of equity	19.40%	23.00%

Tax rate	34.80%	45.70%
Debt/Equity ratio	1.22	1.22
Cost of debt	6.10%	7.00%

After-tax WACC	11.0%	12.5%


Selected WACC	11.7%

KANORICHEM.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 KANORICHEM.NS:

cost_of_equity (21.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.51) + 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.