ORTEL.NS WACC - Weighted Average Cost of Capital

The WACC of Ortel Communications Ltd (ORTEL.NS) is 5.3%.

The Cost of Equity of Ortel Communications Ltd (ORTEL.NS) is 32.15%.

The Cost of Debt of Ortel Communications Ltd (ORTEL.NS) is 6.50%.

	Range	Selected
Cost of equity	18.90% - 45.40%	32.15%
Tax rate	30.00% - 30.00%	30.00%
Cost of debt	6.50% - 6.50%	6.50%
WACC	5.0% - 5.7%	5.3%

WACC

ORTEL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.45	4.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.90%	45.40%

Tax rate	30.00%	30.00%
Debt/Equity ratio	34.92	34.92
Cost of debt	6.50%	6.50%

After-tax WACC	5.0%	5.7%


Selected WACC	5.3%

ORTEL.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 ORTEL.NS:

cost_of_equity (32.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.45) + 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.