OLECTRA.NS WACC - Weighted Average Cost of Capital

The WACC of Olectra Greentech Ltd (OLECTRA.NS) is 14.7%.

The Cost of Equity of Olectra Greentech Ltd (OLECTRA.NS) is 14.50%.

The Cost of Debt of Olectra Greentech Ltd (OLECTRA.NS) is 33.55%.

	Range	Selected
Cost of equity	12.20% - 16.80%	14.50%
Tax rate	25.70% - 25.80%	25.75%
Cost of debt	8.10% - 59.00%	33.55%
WACC	12.0% - 17.4%	14.7%

WACC

OLECTRA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.64	0.96

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.20%	16.80%

Tax rate	25.70%	25.80%
Debt/Equity ratio	0.02	0.02
Cost of debt	8.10%	59.00%

After-tax WACC	12.0%	17.4%


Selected WACC	14.7%

OLECTRA.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 OLECTRA.NS:

cost_of_equity (14.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.64) + 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.