THEINVEST.NS WACC - Weighted Average Cost of Capital

The WACC of Investment Trust of India Ltd (THEINVEST.NS) is 11.6%.

The Cost of Equity of Investment Trust of India Ltd (THEINVEST.NS) is 16.15%.

The Cost of Debt of Investment Trust of India Ltd (THEINVEST.NS) is 10.15%.

	Range	Selected
Cost of equity	14.40% - 17.90%	16.15%
Tax rate	42.30% - 45.80%	44.05%
Cost of debt	9.80% - 10.50%	10.15%
WACC	10.6% - 12.6%	11.6%

WACC

THEINVEST.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.9	1.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.40%	17.90%

Tax rate	42.30%	45.80%
Debt/Equity ratio	0.75	0.75
Cost of debt	9.80%	10.50%

After-tax WACC	10.6%	12.6%


Selected WACC	11.6%

THEINVEST.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 THEINVEST.NS:

cost_of_equity (16.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.9) + 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.