RPGLIFE.NS WACC - Weighted Average Cost of Capital

The WACC of RPG Life Sciences Ltd (RPGLIFE.NS) is 12.8%.

The Cost of Equity of RPG Life Sciences Ltd (RPGLIFE.NS) is 20.10%.

The Cost of Debt of RPG Life Sciences Ltd (RPGLIFE.NS) is 7.50%.

	Range	Selected
Cost of equity	17.00% - 23.20%	20.10%
Tax rate	25.50% - 25.90%	25.70%
Cost of debt	7.50% - 7.50%	7.50%
WACC	11.3% - 14.4%	12.8%

WACC

RPGLIFE.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.22	1.65

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.00%	23.20%

Tax rate	25.50%	25.90%
Debt/Equity ratio	1	1
Cost of debt	7.50%	7.50%

After-tax WACC	11.3%	14.4%


Selected WACC	12.8%

RPGLIFE.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 RPGLIFE.NS:

cost_of_equity (20.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.22) + 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.