RPGLIFE.NS WACC - Weighted Average Cost of Capital

The WACC of RPG Life Sciences Ltd (RPGLIFE.NS) is 12.4%.

The Cost of Equity of RPG Life Sciences Ltd (RPGLIFE.NS) is 19.20%.

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

	Range	Selected
Cost of equity	16.60% - 21.80%	19.20%
Tax rate	25.50% - 25.90%	25.70%
Cost of debt	7.50% - 7.50%	7.50%
WACC	11.1% - 13.7%	12.4%

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	1.17	1.5

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.60%	21.80%

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

After-tax WACC	11.1%	13.7%


Selected WACC	12.4%

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 (19.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.17) + 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.