TDPOWERSYS.NS WACC - Weighted Average Cost of Capital

The WACC of TD Power Systems Ltd (TDPOWERSYS.NS) is 11.1%.

The Cost of Equity of TD Power Systems Ltd (TDPOWERSYS.NS) is 11.10%.

The Cost of Debt of TD Power Systems Ltd (TDPOWERSYS.NS) is 7.50%.

	Range	Selected
Cost of equity	9.80% - 12.40%	11.10%
Tax rate	21.90% - 24.00%	22.95%
Cost of debt	7.50% - 7.50%	7.50%
WACC	9.8% - 12.4%	11.1%

WACC

TDPOWERSYS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.35	0.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.80%	12.40%

Tax rate	21.90%	24.00%
Debt/Equity ratio	0	0
Cost of debt	7.50%	7.50%

After-tax WACC	9.8%	12.4%


Selected WACC	11.1%

TDPOWERSYS.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 TDPOWERSYS.NS:

cost_of_equity (11.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.35) + 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.