RKFORGE.NS
Ramkrishna Forgings Ltd
Price:  
613.5 
INR
Volume:  
320,039
India | Metals & Mining

RKFORGE.NS WACC - Weighted Average Cost of Capital

The WACC of Ramkrishna Forgings Ltd (RKFORGE.NS) is 15.5%.

The Cost of Equity of Ramkrishna Forgings Ltd (RKFORGE.NS) is 16.6%.
The Cost of Debt of Ramkrishna Forgings Ltd (RKFORGE.NS) is 8.3%.

RangeSelected
Cost of equity15.2% - 18.0%16.6%
Tax rate30.5% - 34.2%32.35%
Cost of debt8.1% - 8.5%8.3%
WACC14.3% - 16.7%15.5%
WACC

RKFORGE.NS WACC calculation

CategoryLowHigh
Long-term bond rate6.9%7.4%
Equity market risk premium8.3%9.3%
Adjusted beta11.08
Additional risk adjustments0.0%0.5%
Cost of equity15.2%18.0%
Tax rate30.5%34.2%
Debt/Equity ratio
0.110.11
Cost of debt8.1%8.5%
After-tax WACC14.3%16.7%
Selected WACC15.5%

RKFORGE.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 RKFORGE.NS:

cost_of_equity (16.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1) + 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.