TEJASNET.NS WACC - Weighted Average Cost of Capital

The WACC of Tejas Networks Ltd (TEJASNET.NS) is 12.5%.

The Cost of Equity of Tejas Networks Ltd (TEJASNET.NS) is 14.20%.

The Cost of Debt of Tejas Networks Ltd (TEJASNET.NS) is 14.60%.

	Range	Selected
Cost of equity	12.70% - 15.70%	14.20%
Tax rate	36.70% - 40.90%	38.80%
Cost of debt	7.00% - 22.20%	14.60%
WACC	10.1% - 14.9%	12.5%

WACC

TEJASNET.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.7	0.84

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.70%	15.70%

Tax rate	36.70%	40.90%
Debt/Equity ratio	0.47	0.47
Cost of debt	7.00%	22.20%

After-tax WACC	10.1%	14.9%


Selected WACC	12.5%

TEJASNET.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 TEJASNET.NS:

cost_of_equity (14.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.7) + 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.