NECLIFE.NS WACC - Weighted Average Cost of Capital

The WACC of Nectar Life sciences Ltd (NECLIFE.NS) is 16.6%.

The Cost of Equity of Nectar Life sciences Ltd (NECLIFE.NS) is 24.20%.

The Cost of Debt of Nectar Life sciences Ltd (NECLIFE.NS) is 13.20%.

	Range	Selected
Cost of equity	20.60% - 27.80%	24.20%
Tax rate	21.90% - 33.00%	27.45%
Cost of debt	11.00% - 15.40%	13.20%
WACC	14.4% - 18.9%	16.6%

WACC

NECLIFE.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.65	2.14

Additional risk adjustments	0.0%	0.5%
Cost of equity	20.60%	27.80%

Tax rate	21.90%	33.00%
Debt/Equity ratio	1.04	1.04
Cost of debt	11.00%	15.40%

After-tax WACC	14.4%	18.9%


Selected WACC	16.6%

NECLIFE.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 NECLIFE.NS:

cost_of_equity (24.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.65) + 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.