TAJGVK.NS WACC - Weighted Average Cost of Capital

The WACC of TAJ GVK Hotels and Resorts Ltd (TAJGVK.NS) is 12.9%.

The Cost of Equity of TAJ GVK Hotels and Resorts Ltd (TAJGVK.NS) is 13.25%.

The Cost of Debt of TAJ GVK Hotels and Resorts Ltd (TAJGVK.NS) is 7.20%.

	Range	Selected
Cost of equity	11.50% - 15.00%	13.25%
Tax rate	28.10% - 30.40%	29.25%
Cost of debt	6.90% - 7.50%	7.20%
WACC	11.2% - 14.6%	12.9%

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	0.55	0.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	15.00%

Tax rate	28.10%	30.40%
Debt/Equity ratio	0.04	0.04
Cost of debt	6.90%	7.50%

After-tax WACC	11.2%	14.6%


Selected WACC	12.9%

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 (13.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.55) + 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.