RALLIS.NS WACC - Weighted Average Cost of Capital

The WACC of Rallis India Ltd (RALLIS.NS) is 16.2%.

The Cost of Equity of Rallis India Ltd (RALLIS.NS) is 16.55%.

The Cost of Debt of Rallis India Ltd (RALLIS.NS) is 6.50%.

	Range	Selected
Cost of equity	14.70% - 18.40%	16.55%
Tax rate	24.60% - 25.30%	24.95%
Cost of debt	5.50% - 7.50%	6.50%
WACC	14.4% - 18.0%	16.2%

WACC

RALLIS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.95	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.70%	18.40%

Tax rate	24.60%	25.30%
Debt/Equity ratio	0.03	0.03
Cost of debt	5.50%	7.50%

After-tax WACC	14.4%	18.0%


Selected WACC	16.2%

RALLIS.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 RALLIS.NS:

cost_of_equity (16.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.95) + 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.