KOTHARIPET.NS WACC - Weighted Average Cost of Capital

The WACC of Kothari Petrochemicals Ltd (KOTHARIPET.NS) is 14.0%.

The Cost of Equity of Kothari Petrochemicals Ltd (KOTHARIPET.NS) is 18.50%.

The Cost of Debt of Kothari Petrochemicals Ltd (KOTHARIPET.NS) is 13.35%.

	Range	Selected
Cost of equity	15.90% - 21.10%	18.50%
Tax rate	28.50% - 28.80%	28.65%
Cost of debt	7.50% - 19.20%	13.35%
WACC	10.6% - 17.4%	14.0%

WACC

KOTHARIPET.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.09	1.42

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.90%	21.10%

Tax rate	28.50%	28.80%
Debt/Equity ratio	1	1
Cost of debt	7.50%	19.20%

After-tax WACC	10.6%	17.4%


Selected WACC	14.0%

KOTHARIPET.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 KOTHARIPET.NS:

cost_of_equity (18.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.09) + 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.