REDINGTON.NS WACC - Weighted Average Cost of Capital

The WACC of Redington (India) Ltd (REDINGTON.NS) is 14.3%.

The Cost of Equity of Redington (India) Ltd (REDINGTON.NS) is 15.05%.

The Cost of Debt of Redington (India) Ltd (REDINGTON.NS) is 12.85%.

	Range	Selected
Cost of equity	13.10% - 17.00%	15.05%
Tax rate	21.40% - 21.70%	21.55%
Cost of debt	7.80% - 17.90%	12.85%
WACC	12.1% - 16.6%	14.3%

WACC

REDINGTON.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.76	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.10%	17.00%

Tax rate	21.40%	21.70%
Debt/Equity ratio	0.18	0.18
Cost of debt	7.80%	17.90%

After-tax WACC	12.1%	16.6%


Selected WACC	14.3%

REDINGTON.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 REDINGTON.NS:

cost_of_equity (15.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.76) + 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.