RELIANCE.NS WACC - Weighted Average Cost of Capital

The WACC of Reliance Industries Ltd (RELIANCE.NS) is 14.1%.

The Cost of Equity of Reliance Industries Ltd (RELIANCE.NS) is 15.45%.

The Cost of Debt of Reliance Industries Ltd (RELIANCE.NS) is 9.40%.

	Range	Selected
Cost of equity	14.20% - 16.70%	15.45%
Tax rate	20.80% - 22.50%	21.65%
Cost of debt	8.60% - 10.20%	9.40%
WACC	13.0% - 15.2%	14.1%

WACC

RELIANCE.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.89	0.95

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.20%	16.70%

Tax rate	20.80%	22.50%
Debt/Equity ratio	0.2	0.2
Cost of debt	8.60%	10.20%

After-tax WACC	13.0%	15.2%


Selected WACC	14.1%

RELIANCE.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 RELIANCE.NS:

cost_of_equity (15.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.89) + 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.