TAJGVK.NS WACC - Weighted Average Cost of Capital

The WACC of TAJ GVK Hotels and Resorts Ltd (TAJGVK.NS) is 13.4%.

The Cost of Equity of TAJ GVK Hotels and Resorts Ltd (TAJGVK.NS) is 13.55%.

The Cost of Debt of TAJ GVK Hotels and Resorts Ltd (TAJGVK.NS) is 7.75%.

	Range	Selected
Cost of equity	12.30% - 14.80%	13.55%
Tax rate	28.10% - 30.40%	29.25%
Cost of debt	7.50% - 8.00%	7.75%
WACC	12.1% - 14.6%	13.4%

WACC

TAJGVK.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.65	0.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.30%	14.80%

Tax rate	28.10%	30.40%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.50%	8.00%

After-tax WACC	12.1%	14.6%


Selected WACC	13.4%

TAJGVK.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 TAJGVK.NS:

cost_of_equity (13.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.65) + 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.