ORIENTELEC.NS WACC - Weighted Average Cost of Capital

The WACC of Orient Electric Ltd (ORIENTELEC.NS) is 14.6%.

The Cost of Equity of Orient Electric Ltd (ORIENTELEC.NS) is 14.80%.

The Cost of Debt of Orient Electric Ltd (ORIENTELEC.NS) is 10.35%.

	Range	Selected
Cost of equity	13.50% - 16.10%	14.80%
Tax rate	25.50% - 25.70%	25.60%
Cost of debt	7.50% - 13.20%	10.35%
WACC	13.3% - 15.9%	14.6%

WACC

ORIENTELEC.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.79	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.50%	16.10%

Tax rate	25.50%	25.70%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.50%	13.20%

After-tax WACC	13.3%	15.9%


Selected WACC	14.6%

ORIENTELEC.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 ORIENTELEC.NS:

cost_of_equity (14.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.79) + 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.