RADICO.NS WACC - Weighted Average Cost of Capital

The WACC of Radico Khaitan Ltd (RADICO.NS) is 13.6%.

The Cost of Equity of Radico Khaitan Ltd (RADICO.NS) is 13.85%.

The Cost of Debt of Radico Khaitan Ltd (RADICO.NS) is 7.25%.

	Range	Selected
Cost of equity	11.60% - 16.10%	13.85%
Tax rate	24.50% - 25.10%	24.80%
Cost of debt	6.90% - 7.60%	7.25%
WACC	11.4% - 15.8%	13.6%

WACC

RADICO.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.57	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.60%	16.10%

Tax rate	24.50%	25.10%
Debt/Equity ratio	0.03	0.03
Cost of debt	6.90%	7.60%

After-tax WACC	11.4%	15.8%


Selected WACC	13.6%

RADICO.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 RADICO.NS:

cost_of_equity (13.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.57) + 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.