LINCPEN.NS WACC - Weighted Average Cost of Capital

The WACC of Linc Pen & Plastics Ltd (LINCPEN.NS) is 12.3%.

The Cost of Equity of Linc Pen & Plastics Ltd (LINCPEN.NS) is 12.40%.

The Cost of Debt of Linc Pen & Plastics Ltd (LINCPEN.NS) is 12.80%.

	Range	Selected
Cost of equity	11.00% - 13.80%	12.40%
Tax rate	33.50% - 43.70%	38.60%
Cost of debt	8.60% - 17.00%	12.80%
WACC	10.9% - 13.7%	12.3%

WACC

LINCPEN.NS WACC calculation

Category	Low	High

Long-term bond rate	7.5%	8.0%
Equity market risk premium	6.9%	7.9%
Adjusted beta	0.5	0.66

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.00%	13.80%

Tax rate	33.50%	43.70%
Debt/Equity ratio	0.02	0.02
Cost of debt	8.60%	17.00%

After-tax WACC	10.9%	13.7%


Selected WACC	12.3%

LINCPEN.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 LINCPEN.NS:

cost_of_equity (12.40%) = risk_free_rate (7.75%) + equity_risk_premium (7.40%) * adjusted_beta (0.5) + 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.