RCF.NS WACC - Weighted Average Cost of Capital

The WACC of Rashtriya Chemicals and Fertilizers Ltd (RCF.NS) is 14.5%.

The Cost of Equity of Rashtriya Chemicals and Fertilizers Ltd (RCF.NS) is 17.80%.

The Cost of Debt of Rashtriya Chemicals and Fertilizers Ltd (RCF.NS) is 8.25%.

	Range	Selected
Cost of equity	16.40% - 19.20%	17.80%
Tax rate	24.80% - 25.30%	25.05%
Cost of debt	6.50% - 10.00%	8.25%
WACC	13.1% - 15.9%	14.5%

WACC

RCF.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.14	1.22

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.40%	19.20%

Tax rate	24.80%	25.30%
Debt/Equity ratio	0.4	0.4
Cost of debt	6.50%	10.00%

After-tax WACC	13.1%	15.9%


Selected WACC	14.5%

RCF.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 RCF.NS:

cost_of_equity (17.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.14) + 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.