KITEX.NS WACC - Weighted Average Cost of Capital

The WACC of Kitex Garments Ltd (KITEX.NS) is 12.6%.

The Cost of Equity of Kitex Garments Ltd (KITEX.NS) is 13.60%.

The Cost of Debt of Kitex Garments Ltd (KITEX.NS) is 7.50%.

	Range	Selected
Cost of equity	11.20% - 16.00%	13.60%
Tax rate	27.90% - 29.40%	28.65%
Cost of debt	7.50% - 7.50%	7.50%
WACC	10.5% - 14.7%	12.6%

WACC

KITEX.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.52	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.20%	16.00%

Tax rate	27.90%	29.40%
Debt/Equity ratio	0.14	0.14
Cost of debt	7.50%	7.50%

After-tax WACC	10.5%	14.7%


Selected WACC	12.6%

KITEX.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 KITEX.NS:

cost_of_equity (13.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.52) + 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.