RCOM.NS WACC - Weighted Average Cost of Capital

The WACC of Reliance Communications Ltd (RCOM.NS) is 6.4%.

The Cost of Equity of Reliance Communications Ltd (RCOM.NS) is 118.75%.

The Cost of Debt of Reliance Communications Ltd (RCOM.NS) is 5.50%.

	Range	Selected
Cost of equity	74.60% - 162.90%	118.75%
Tax rate	0.80% - 2.60%	1.70%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.6% - 8.2%	6.4%

WACC

RCOM.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	8.15	16.65

Additional risk adjustments	0.0%	0.5%
Cost of equity	74.60%	162.90%

Tax rate	0.80%	2.60%
Debt/Equity ratio	115.39	115.39
Cost of debt	4.00%	7.00%

After-tax WACC	4.6%	8.2%


Selected WACC	6.4%

RCOM.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 RCOM.NS:

cost_of_equity (118.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (8.15) + 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.