NITINFIRE.NS WACC - Weighted Average Cost of Capital

The WACC of Nitin Fire Protection Industries Ltd (NITINFIRE.NS) is 19.6%.

The Cost of Equity of Nitin Fire Protection Industries Ltd (NITINFIRE.NS) is 48.80%.

The Cost of Debt of Nitin Fire Protection Industries Ltd (NITINFIRE.NS) is 17.60%.

	Range	Selected
Cost of equity	41.50% - 56.10%	48.80%
Tax rate	1.90% - 3.20%	2.55%
Cost of debt	10.90% - 24.30%	17.60%
WACC	13.1% - 26.1%	19.6%

WACC

NITINFIRE.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	6.9%	7.9%
Adjusted beta	4.99	6.08

Additional risk adjustments	0.0%	0.5%
Cost of equity	41.50%	56.10%

Tax rate	1.90%	3.20%
Debt/Equity ratio	11.83	11.83
Cost of debt	10.90%	24.30%

After-tax WACC	13.1%	26.1%


Selected WACC	19.6%

NITINFIRE.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 NITINFIRE.NS:

cost_of_equity (48.80%) = risk_free_rate (7.15%) + equity_risk_premium (7.40%) * adjusted_beta (4.99) + 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.