RCF.NS WACC - Weighted Average Cost of Capital

The WACC of Rashtriya Chemicals and Fertilizers Ltd (RCF.NS) is 13.4%.

The Cost of Equity of Rashtriya Chemicals and Fertilizers Ltd (RCF.NS) is 16.50%.

The Cost of Debt of Rashtriya Chemicals and Fertilizers Ltd (RCF.NS) is 8.75%.

	Range	Selected
Cost of equity	13.90% - 19.10%	16.50%
Tax rate	25.30% - 25.70%	25.50%
Cost of debt	7.50% - 10.00%	8.75%
WACC	11.3% - 15.5%	13.4%

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	0.84	1.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.90%	19.10%

Tax rate	25.30%	25.70%
Debt/Equity ratio	0.45	0.45
Cost of debt	7.50%	10.00%

After-tax WACC	11.3%	15.5%


Selected WACC	13.4%

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 (16.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.84) + 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.