TERASOFT.NS
Tera Software Ltd
Price:  
260.00 
INR
Volume:  
10,430.00
India | IT Services
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

TERASOFT.NS WACC - Weighted Average Cost of Capital

The WACC of Tera Software Ltd (TERASOFT.NS) is 11.1%.

The Cost of Equity of Tera Software Ltd (TERASOFT.NS) is 11.85%.
The Cost of Debt of Tera Software Ltd (TERASOFT.NS) is 5.00%.

Range Selected
Cost of equity 10.50% - 13.20% 11.85%
Tax rate 30.00% - 30.00% 30.00%
Cost of debt 5.00% - 5.00% 5.00%
WACC 9.9% - 12.3% 11.1%
WACC

TERASOFT.NS WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.44 0.57
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.50% 13.20%
Tax rate 30.00% 30.00%
Debt/Equity ratio 0.1 0.1
Cost of debt 5.00% 5.00%
After-tax WACC 9.9% 12.3%
Selected WACC 11.1%

TERASOFT.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 TERASOFT.NS:

cost_of_equity (11.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.44) + 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.