LYKALABS.NS WACC - Weighted Average Cost of Capital

The WACC of Lyka Labs Ltd (LYKALABS.NS) is 13.3%.

The Cost of Equity of Lyka Labs Ltd (LYKALABS.NS) is 14.25%.

The Cost of Debt of Lyka Labs Ltd (LYKALABS.NS) is 9.55%.

	Range	Selected
Cost of equity	12.80% - 15.70%	14.25%
Tax rate	17.70% - 31.20%	24.45%
Cost of debt	9.10% - 10.00%	9.55%
WACC	12.1% - 14.6%	13.3%

WACC

LYKALABS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.71	0.84

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.80%	15.70%

Tax rate	17.70%	31.20%
Debt/Equity ratio	0.15	0.15
Cost of debt	9.10%	10.00%

After-tax WACC	12.1%	14.6%


Selected WACC	13.3%

LYKALABS.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 LYKALABS.NS:

cost_of_equity (14.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.71) + 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.