TALBROAUTO.NS WACC - Weighted Average Cost of Capital

The WACC of Talbros Automotive Components Ltd (TALBROAUTO.NS) is 16.0%.

The Cost of Equity of Talbros Automotive Components Ltd (TALBROAUTO.NS) is 16.50%.

The Cost of Debt of Talbros Automotive Components Ltd (TALBROAUTO.NS) is 9.85%.

	Range	Selected
Cost of equity	14.20% - 18.80%	16.50%
Tax rate	20.70% - 22.30%	21.50%
Cost of debt	7.80% - 11.90%	9.85%
WACC	13.7% - 18.3%	16.0%

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	0.88	1.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.20%	18.80%

Tax rate	20.70%	22.30%
Debt/Equity ratio	0.06	0.06
Cost of debt	7.80%	11.90%

After-tax WACC	13.7%	18.3%


Selected WACC	16.0%

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 (16.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.88) + 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.