RKEC.NS WACC - Weighted Average Cost of Capital

The WACC of RKEC Projects Ltd (RKEC.NS) is 12.9%.

The Cost of Equity of RKEC Projects Ltd (RKEC.NS) is 16.85%.

The Cost of Debt of RKEC Projects Ltd (RKEC.NS) is 11.30%.

	Range	Selected
Cost of equity	14.90% - 18.80%	16.85%
Tax rate	28.30% - 29.40%	28.85%
Cost of debt	10.00% - 12.60%	11.30%
WACC	11.4% - 14.4%	12.9%

WACC

RKEC.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	1.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.90%	18.80%

Tax rate	28.30%	29.40%
Debt/Equity ratio	0.82	0.82
Cost of debt	10.00%	12.60%

After-tax WACC	11.4%	14.4%


Selected WACC	12.9%

RKEC.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 RKEC.NS:

cost_of_equity (16.85%) = 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.