ORTEL.NS WACC - Weighted Average Cost of Capital

The WACC of Ortel Communications Ltd (ORTEL.NS) is 5.6%.

The Cost of Equity of Ortel Communications Ltd (ORTEL.NS) is 40.05%.

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

	Range	Selected
Cost of equity	25.40% - 54.70%	40.05%
Tax rate	30.00% - 30.00%	30.00%
Cost of debt	6.50% - 6.50%	6.50%
WACC	5.2% - 6.1%	5.6%

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	2.23	5.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	25.40%	54.70%

Tax rate	30.00%	30.00%
Debt/Equity ratio	31.89	31.89
Cost of debt	6.50%	6.50%

After-tax WACC	5.2%	6.1%


Selected WACC	5.6%

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 (40.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (2.23) + 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.