RKDL.NS WACC - Weighted Average Cost of Capital

The WACC of Ravi Kumar Distilleries Ltd (RKDL.NS) is 12.7%.

The Cost of Equity of Ravi Kumar Distilleries Ltd (RKDL.NS) is 17.20%.

The Cost of Debt of Ravi Kumar Distilleries Ltd (RKDL.NS) is 5.50%.

	Range	Selected
Cost of equity	14.90% - 19.50%	17.20%
Tax rate	-% - 0.20%	0.10%
Cost of debt	4.00% - 7.00%	5.50%
WACC	10.7% - 14.7%	12.7%

WACC

RKDL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.96	1.25

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.90%	19.50%

Tax rate	-%	0.20%
Debt/Equity ratio	0.62	0.62
Cost of debt	4.00%	7.00%

After-tax WACC	10.7%	14.7%


Selected WACC	12.7%

RKDL.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 RKDL.NS:

cost_of_equity (17.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.96) + 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.