TATAINVEST.NS WACC - Weighted Average Cost of Capital

The WACC of Tata Investment Corporation Ltd (TATAINVEST.NS) is 14.1%.

The Cost of Equity of Tata Investment Corporation Ltd (TATAINVEST.NS) is 14.05%.

The Cost of Debt of Tata Investment Corporation Ltd (TATAINVEST.NS) is 9.35%.

	Range	Selected
Cost of equity	10.90% - 17.20%	14.05%
Tax rate	7.60% - 9.70%	8.65%
Cost of debt	7.50% - 11.20%	9.35%
WACC	10.9% - 17.2%	14.1%

WACC

TATAINVEST.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.49	1

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.90%	17.20%

Tax rate	7.60%	9.70%
Debt/Equity ratio	0	0
Cost of debt	7.50%	11.20%

After-tax WACC	10.9%	17.2%


Selected WACC	14.1%

TATAINVEST.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 TATAINVEST.NS:

cost_of_equity (14.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.49) + 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.