LIBAS.NS WACC - Weighted Average Cost of Capital

The WACC of Libas Consumer Products Ltd (LIBAS.NS) is 12.3%.

The Cost of Equity of Libas Consumer Products Ltd (LIBAS.NS) is 14.35%.

The Cost of Debt of Libas Consumer Products Ltd (LIBAS.NS) is 8.90%.

	Range	Selected
Cost of equity	12.70% - 16.00%	14.35%
Tax rate	2.00% - 5.30%	3.65%
Cost of debt	7.00% - 10.80%	8.90%
WACC	10.6% - 13.9%	12.3%

WACC

LIBAS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.7	0.87

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.70%	16.00%

Tax rate	2.00%	5.30%
Debt/Equity ratio	0.55	0.55
Cost of debt	7.00%	10.80%

After-tax WACC	10.6%	13.9%


Selected WACC	12.3%

LIBAS.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 LIBAS.NS:

cost_of_equity (14.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.7) + 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.