TARMAT.NS WACC - Weighted Average Cost of Capital

The WACC of Tarmat Ltd (TARMAT.NS) is 12.7%.

The Cost of Equity of Tarmat Ltd (TARMAT.NS) is 13.15%.

The Cost of Debt of Tarmat Ltd (TARMAT.NS) is 6.90%.

	Range	Selected
Cost of equity	11.40% - 14.90%	13.15%
Tax rate	2.80% - 6.20%	4.50%
Cost of debt	5.20% - 8.60%	6.90%
WACC	11.0% - 14.5%	12.7%

WACC

TARMAT.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	11.40%	14.90%

Tax rate	2.80%	6.20%
Debt/Equity ratio	0.07	0.07
Cost of debt	5.20%	8.60%

After-tax WACC	11.0%	14.5%


Selected WACC	12.7%

TARMAT.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 TARMAT.NS:

cost_of_equity (13.15%) = 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.