TEXRAIL.NS WACC - Weighted Average Cost of Capital

The WACC of Texmaco Rail & Engineering Ltd (TEXRAIL.NS) is 16.2%.

The Cost of Equity of Texmaco Rail & Engineering Ltd (TEXRAIL.NS) is 17.25%.

The Cost of Debt of Texmaco Rail & Engineering Ltd (TEXRAIL.NS) is 12.35%.

	Range	Selected
Cost of equity	16.00% - 18.50%	17.25%
Tax rate	37.30% - 41.80%	39.55%
Cost of debt	10.50% - 14.20%	12.35%
WACC	15.0% - 17.5%	16.2%

WACC

TEXRAIL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.09	1.15

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.00%	18.50%

Tax rate	37.30%	41.80%
Debt/Equity ratio	0.12	0.12
Cost of debt	10.50%	14.20%

After-tax WACC	15.0%	17.5%


Selected WACC	16.2%

TEXRAIL.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 TEXRAIL.NS:

cost_of_equity (17.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.09) + 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.