RANEHOLDIN.NS WACC - Weighted Average Cost of Capital

The WACC of Rane Holdings Ltd (RANEHOLDIN.NS) is 14.8%.

The Cost of Equity of Rane Holdings Ltd (RANEHOLDIN.NS) is 18.50%.

The Cost of Debt of Rane Holdings Ltd (RANEHOLDIN.NS) is 8.15%.

	Range	Selected
Cost of equity	16.70% - 20.30%	18.50%
Tax rate	30.00% - 30.00%	30.00%
Cost of debt	6.30% - 10.00%	8.15%
WACC	13.1% - 16.4%	14.8%

WACC

RANEHOLDIN.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.19	1.33

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.70%	20.30%

Tax rate	30.00%	30.00%
Debt/Equity ratio	0.41	0.41
Cost of debt	6.30%	10.00%

After-tax WACC	13.1%	16.4%


Selected WACC	14.8%

RANEHOLDIN.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 RANEHOLDIN.NS:

cost_of_equity (18.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.19) + 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.