NRAIL.NS WACC - Weighted Average Cost of Capital

The WACC of N R Agarwal Industries Ltd (NRAIL.NS) is 12.4%.

The Cost of Equity of N R Agarwal Industries Ltd (NRAIL.NS) is 16.55%.

The Cost of Debt of N R Agarwal Industries Ltd (NRAIL.NS) is 11.65%.

	Range	Selected
Cost of equity	13.90% - 19.20%	16.55%
Tax rate	20.00% - 28.90%	24.45%
Cost of debt	7.90% - 15.40%	11.65%
WACC	10.0% - 14.9%	12.4%

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	0.84	1.21

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.90%	19.20%

Tax rate	20.00%	28.90%
Debt/Equity ratio	1.07	1.07
Cost of debt	7.90%	15.40%

After-tax WACC	10.0%	14.9%


Selected WACC	12.4%

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 (16.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.84) + 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.