KHAICHEM.NS WACC - Weighted Average Cost of Capital

The WACC of Khaitan Chemicals and Fertilizers Ltd (KHAICHEM.NS) is 11.6%.

The Cost of Equity of Khaitan Chemicals and Fertilizers Ltd (KHAICHEM.NS) is 14.20%.

The Cost of Debt of Khaitan Chemicals and Fertilizers Ltd (KHAICHEM.NS) is 10.15%.

	Range	Selected
Cost of equity	11.40% - 17.00%	14.20%
Tax rate	24.90% - 28.10%	26.50%
Cost of debt	7.00% - 13.30%	10.15%
WACC	9.1% - 14.2%	11.6%

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	0.54	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.40%	17.00%

Tax rate	24.90%	28.10%
Debt/Equity ratio	0.61	0.61
Cost of debt	7.00%	13.30%

After-tax WACC	9.1%	14.2%


Selected WACC	11.6%

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 (14.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.54) + 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.