The WACC of Tata Steel Long Products Ltd (TATASTLLP.NS) is 11.3%.
Range | Selected | |
Cost of equity | 26.6% - 36.5% | 31.55% |
Tax rate | 8.3% - 16.2% | 12.25% |
Cost of debt | 7.0% - 7.0% | 7% |
WACC | 10.5% - 12.1% | 11.3% |
Category | Low | High |
Long-term bond rate | 6.9% | 7.4% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 2.37 | 3.07 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 26.6% | 36.5% |
Tax rate | 8.3% | 16.2% |
Debt/Equity ratio | 3.95 | 3.95 |
Cost of debt | 7.0% | 7.0% |
After-tax WACC | 10.5% | 12.1% |
Selected WACC | 11.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
TATASTLLP.NS | Tata Steel Long Products Ltd | 3.95 | 1.2 | 0.26 |
ELECTHERM.NS | Electrotherm (India) Ltd | 1.46 | 0.7 | 0.3 |
JAIBALAJI.NS | Jai Balaji Industries Ltd | 0.04 | 1.28 | 1.23 |
JAYNECOIND.NS | Jayaswal Neco Industries Ltd | 0.71 | 1.79 | 1.08 |
JSWISPL.NS | JSW Ispat Special Products Ltd | 1.48 | 1.45 | 0.62 |
MAHSEAMLES.NS | Maharashtra Seamless Ltd | 0 | 1.63 | 1.63 |
NATNLSTEEL.NS | National Steel and Agro Industries Ltd | 87.46 | -1.58 | -0.02 |
PRAKASH.NS | Prakash Industries Ltd | 0.15 | 1.2 | 1.06 |
RATNAMANI.NS | Ratnamani Metals and Tubes Ltd | 0.01 | 0.7 | 0.7 |
SARDAEN.NS | Sarda Energy & Minerals Ltd | 0.09 | 0.85 | 0.78 |
Low | High | |
Unlevered beta | 0.67 | 0.89 |
Relevered beta | 3.04 | 4.09 |
Adjusted relevered beta | 2.37 | 3.07 |
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 TATASTLLP.NS:
cost_of_equity (31.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (2.37) + 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.