TCI.NS WACC - Weighted Average Cost of Capital

The WACC of Transport Corporation of India Ltd (TCI.NS) is 16.6%.

The Cost of Equity of Transport Corporation of India Ltd (TCI.NS) is 16.85%.

The Cost of Debt of Transport Corporation of India Ltd (TCI.NS) is 7.45%.

	Range	Selected
Cost of equity	15.20% - 18.50%	16.85%
Tax rate	10.60% - 11.60%	11.10%
Cost of debt	7.40% - 7.50%	7.45%
WACC	15.0% - 18.2%	16.6%

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	1.01	1.14

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.20%	18.50%

Tax rate	10.60%	11.60%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.40%	7.50%

After-tax WACC	15.0%	18.2%


Selected WACC	16.6%

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 (16.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.01) + 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.