TCI.NS WACC - Weighted Average Cost of Capital

The WACC of Transport Corporation of India Ltd (TCI.NS) is 15.1%.

The Cost of Equity of Transport Corporation of India Ltd (TCI.NS) is 15.40%.

The Cost of Debt of Transport Corporation of India Ltd (TCI.NS) is 7.20%.

	Range	Selected
Cost of equity	13.60% - 17.20%	15.40%
Tax rate	10.60% - 11.60%	11.10%
Cost of debt	6.90% - 7.50%	7.20%
WACC	13.4% - 16.8%	15.1%

WACC

TCI.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.82	1

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.60%	17.20%

Tax rate	10.60%	11.60%
Debt/Equity ratio	0.03	0.03
Cost of debt	6.90%	7.50%

After-tax WACC	13.4%	16.8%


Selected WACC	15.1%

TCI.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 TCI.NS:

cost_of_equity (15.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.82) + 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.