RCF.NS WACC - Weighted Average Cost of Capital

The WACC of Rashtriya Chemicals and Fertilizers Ltd (RCF.NS) is 15.8%.

The Cost of Equity of Rashtriya Chemicals and Fertilizers Ltd (RCF.NS) is 18.70%.

The Cost of Debt of Rashtriya Chemicals and Fertilizers Ltd (RCF.NS) is 9.00%.

	Range	Selected
Cost of equity	16.40% - 21.00%	18.70%
Tax rate	25.30% - 25.70%	25.50%
Cost of debt	7.50% - 10.50%	9.00%
WACC	13.8% - 17.8%	15.8%

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	1.15	1.41

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.40%	21.00%

Tax rate	25.30%	25.70%
Debt/Equity ratio	0.32	0.32
Cost of debt	7.50%	10.50%

After-tax WACC	13.8%	17.8%


Selected WACC	15.8%

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 (18.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.15) + 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.