TATAINVEST.NS WACC - Weighted Average Cost of Capital

The WACC of Tata Investment Corporation Ltd (TATAINVEST.NS) is 12.2%.

The Cost of Equity of Tata Investment Corporation Ltd (TATAINVEST.NS) is 12.15%.

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

	Range	Selected
Cost of equity	10.30% - 14.00%	12.15%
Tax rate	7.60% - 9.70%	8.65%
Cost of debt	7.50% - 11.20%	9.35%
WACC	10.3% - 14.0%	12.2%

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	0.42	0.66

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.30%	14.00%

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

After-tax WACC	10.3%	14.0%


Selected WACC	12.2%

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 (12.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.42) + 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.