RELCAPITAL.NS WACC - Weighted Average Cost of Capital

The WACC of Reliance Capital Ltd (RELCAPITAL.NS) is 6.0%.

The Cost of Equity of Reliance Capital Ltd (RELCAPITAL.NS) is 43.55%.

The Cost of Debt of Reliance Capital Ltd (RELCAPITAL.NS) is 5.50%.

	Range	Selected
Cost of equity	30.20% - 56.90%	43.55%
Tax rate	1.90% - 3.70%	2.80%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.4% - 7.6%	6.0%

WACC

RELCAPITAL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	2.81	5.27

Additional risk adjustments	0.0%	0.5%
Cost of equity	30.20%	56.90%

Tax rate	1.90%	3.70%
Debt/Equity ratio	59.04	59.04
Cost of debt	4.00%	7.00%

After-tax WACC	4.4%	7.6%


Selected WACC	6.0%

RELCAPITAL.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 RELCAPITAL.NS:

cost_of_equity (43.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (2.81) + 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.