NITCO.NS WACC - Weighted Average Cost of Capital

The WACC of Nitco Ltd (NITCO.NS) is 11.1%.

The Cost of Equity of Nitco Ltd (NITCO.NS) is 13.15%.

The Cost of Debt of Nitco Ltd (NITCO.NS) is 5.50%.

	Range	Selected
Cost of equity	11.40% - 14.90%	13.15%
Tax rate	0.10% - 1.30%	0.70%
Cost of debt	4.00% - 7.00%	5.50%
WACC	9.4% - 12.8%	11.1%

WACC

NITCO.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.54	0.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.40%	14.90%

Tax rate	0.10%	1.30%
Debt/Equity ratio	0.36	0.36
Cost of debt	4.00%	7.00%

After-tax WACC	9.4%	12.8%


Selected WACC	11.1%

NITCO.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 NITCO.NS:

cost_of_equity (13.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.54) + 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.