LAURUSLABS.NS WACC - Weighted Average Cost of Capital

The WACC of Laurus Labs Ltd (LAURUSLABS.NS) is 14.0%.

The Cost of Equity of Laurus Labs Ltd (LAURUSLABS.NS) is 14.50%.

The Cost of Debt of Laurus Labs Ltd (LAURUSLABS.NS) is 9.25%.

	Range	Selected
Cost of equity	13.30% - 15.70%	14.50%
Tax rate	25.80% - 27.40%	26.60%
Cost of debt	9.10% - 9.40%	9.25%
WACC	12.8% - 15.1%	14.0%

WACC

LAURUSLABS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.78	0.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.30%	15.70%

Tax rate	25.80%	27.40%
Debt/Equity ratio	0.08	0.08
Cost of debt	9.10%	9.40%

After-tax WACC	12.8%	15.1%


Selected WACC	14.0%

LAURUSLABS.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 LAURUSLABS.NS:

cost_of_equity (14.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.78) + 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.