NRAIL.NS WACC - Weighted Average Cost of Capital

The WACC of N R Agarwal Industries Ltd (NRAIL.NS) is 13.1%.

The Cost of Equity of N R Agarwal Industries Ltd (NRAIL.NS) is 21.35%.

The Cost of Debt of N R Agarwal Industries Ltd (NRAIL.NS) is 9.25%.

	Range	Selected
Cost of equity	18.70% - 24.00%	21.35%
Tax rate	27.00% - 29.60%	28.30%
Cost of debt	8.50% - 10.00%	9.25%
WACC	11.7% - 14.5%	13.1%

WACC

NRAIL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.43	1.74

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.70%	24.00%

Tax rate	27.00%	29.60%
Debt/Equity ratio	1.29	1.29
Cost of debt	8.50%	10.00%

After-tax WACC	11.7%	14.5%


Selected WACC	13.1%

NRAIL.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 NRAIL.NS:

cost_of_equity (21.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.43) + 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.