NEULANDLAB.NS WACC - Weighted Average Cost of Capital

The WACC of Neuland Laboratories Ltd (NEULANDLAB.NS) is 16.2%.

The Cost of Equity of Neuland Laboratories Ltd (NEULANDLAB.NS) is 16.30%.

The Cost of Debt of Neuland Laboratories Ltd (NEULANDLAB.NS) is 7.65%.

	Range	Selected
Cost of equity	14.70% - 17.90%	16.30%
Tax rate	23.90% - 24.60%	24.25%
Cost of debt	7.50% - 7.80%	7.65%
WACC	14.6% - 17.8%	16.2%

WACC

NEULANDLAB.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.94	1.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.70%	17.90%

Tax rate	23.90%	24.60%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.50%	7.80%

After-tax WACC	14.6%	17.8%


Selected WACC	16.2%

NEULANDLAB.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 NEULANDLAB.NS:

cost_of_equity (16.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.94) + 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.