NRBBEARING.NS WACC - Weighted Average Cost of Capital

The WACC of NRB Bearings Ltd (NRBBEARING.NS) is 16.1%.

The Cost of Equity of NRB Bearings Ltd (NRBBEARING.NS) is 17.00%.

The Cost of Debt of NRB Bearings Ltd (NRBBEARING.NS) is 6.85%.

	Range	Selected
Cost of equity	15.50% - 18.50%	17.00%
Tax rate	24.20% - 25.00%	24.60%
Cost of debt	6.10% - 7.60%	6.85%
WACC	14.7% - 17.6%	16.1%

WACC

NRBBEARING.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.04	1.14

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.50%	18.50%

Tax rate	24.20%	25.00%
Debt/Equity ratio	0.08	0.08
Cost of debt	6.10%	7.60%

After-tax WACC	14.7%	17.6%


Selected WACC	16.1%

NRBBEARING.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 NRBBEARING.NS:

cost_of_equity (17.00%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.04) + 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.