KHAICHEM.NS WACC - Weighted Average Cost of Capital

The WACC of Khaitan Chemicals and Fertilizers Ltd (KHAICHEM.NS) is 13.6%.

The Cost of Equity of Khaitan Chemicals and Fertilizers Ltd (KHAICHEM.NS) is 13.25%.

The Cost of Debt of Khaitan Chemicals and Fertilizers Ltd (KHAICHEM.NS) is 20.00%.

	Range	Selected
Cost of equity	10.20% - 16.30%	13.25%
Tax rate	24.90% - 30.30%	27.60%
Cost of debt	13.10% - 26.90%	20.00%
WACC	10.1% - 17.0%	13.6%

WACC

KHAICHEM.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.4	0.91

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.20%	16.30%

Tax rate	24.90%	30.30%
Debt/Equity ratio	0.39	0.39
Cost of debt	13.10%	26.90%

After-tax WACC	10.1%	17.0%


Selected WACC	13.6%

KHAICHEM.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 KHAICHEM.NS:

cost_of_equity (13.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.4) + 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.