KARMAENG.NS WACC - Weighted Average Cost of Capital

The WACC of Karma Energy Ltd (KARMAENG.NS) is 13.6%.

The Cost of Equity of Karma Energy Ltd (KARMAENG.NS) is 13.80%.

The Cost of Debt of Karma Energy Ltd (KARMAENG.NS) is 5.50%.

	Range	Selected
Cost of equity	12.00% - 15.60%	13.80%
Tax rate	7.40% - 11.90%	9.65%
Cost of debt	4.00% - 7.00%	5.50%
WACC	11.8% - 15.4%	13.6%

WACC

KARMAENG.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.62	0.83

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.00%	15.60%

Tax rate	7.40%	11.90%
Debt/Equity ratio	0.02	0.02
Cost of debt	4.00%	7.00%

After-tax WACC	11.8%	15.4%


Selected WACC	13.6%

KARMAENG.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 KARMAENG.NS:

cost_of_equity (13.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.62) + 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.