ORTEL.NS WACC - Weighted Average Cost of Capital

The WACC of Ortel Communications Ltd (ORTEL.NS) is 5.5%.

The Cost of Equity of Ortel Communications Ltd (ORTEL.NS) is 36.55%.

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

	Range	Selected
Cost of equity	21.30% - 51.80%	36.55%
Tax rate	30.00% - 30.00%	30.00%
Cost of debt	6.50% - 6.50%	6.50%
WACC	5.0% - 5.9%	5.5%

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	1.74	4.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	21.30%	51.80%

Tax rate	30.00%	30.00%
Debt/Equity ratio	33.74	33.74
Cost of debt	6.50%	6.50%

After-tax WACC	5.0%	5.9%


Selected WACC	5.5%

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 (36.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.74) + 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.