TALBROAUTO.NS WACC - Weighted Average Cost of Capital

The WACC of Talbros Automotive Components Ltd (TALBROAUTO.NS) is 14.0%.

The Cost of Equity of Talbros Automotive Components Ltd (TALBROAUTO.NS) is 14.35%.

The Cost of Debt of Talbros Automotive Components Ltd (TALBROAUTO.NS) is 10.35%.

	Range	Selected
Cost of equity	13.10% - 15.60%	14.35%
Tax rate	20.90% - 22.30%	21.60%
Cost of debt	7.80% - 12.90%	10.35%
WACC	12.7% - 15.3%	14.0%

WACC

TALBROAUTO.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.75	0.83

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.10%	15.60%

Tax rate	20.90%	22.30%
Debt/Equity ratio	0.06	0.06
Cost of debt	7.80%	12.90%

After-tax WACC	12.7%	15.3%


Selected WACC	14.0%

TALBROAUTO.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 TALBROAUTO.NS:

cost_of_equity (14.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.75) + 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.