KOTHARIPRO.NS WACC - Weighted Average Cost of Capital

The WACC of Kothari Products Ltd (KOTHARIPRO.NS) is 13.1%.

The Cost of Equity of Kothari Products Ltd (KOTHARIPRO.NS) is 14.80%.

The Cost of Debt of Kothari Products Ltd (KOTHARIPRO.NS) is 5.50%.

	Range	Selected
Cost of equity	13.40% - 16.20%	14.80%
Tax rate	16.00% - 29.00%	22.50%
Cost of debt	4.00% - 7.00%	5.50%
WACC	11.8% - 14.4%	13.1%

WACC

KOTHARIPRO.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.79	0.9

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.40%	16.20%

Tax rate	16.00%	29.00%
Debt/Equity ratio	0.19	0.19
Cost of debt	4.00%	7.00%

After-tax WACC	11.8%	14.4%


Selected WACC	13.1%

KOTHARIPRO.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 KOTHARIPRO.NS:

cost_of_equity (14.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.79) + 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.