RKEC.NS WACC - Weighted Average Cost of Capital

The WACC of RKEC Projects Ltd (RKEC.NS) is 12.5%.

The Cost of Equity of RKEC Projects Ltd (RKEC.NS) is 17.05%.

The Cost of Debt of RKEC Projects Ltd (RKEC.NS) is 11.90%.

	Range	Selected
Cost of equity	15.40% - 18.70%	17.05%
Tax rate	29.40% - 30.90%	30.15%
Cost of debt	11.70% - 12.10%	11.90%
WACC	11.7% - 13.3%	12.5%

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	1.03	1.16

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.40%	18.70%

Tax rate	29.40%	30.90%
Debt/Equity ratio	1.07	1.07
Cost of debt	11.70%	12.10%

After-tax WACC	11.7%	13.3%


Selected WACC	12.5%

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 (17.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.03) + 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.