TIRUMALCHM.NS WACC - Weighted Average Cost of Capital

The WACC of Thirumalai Chemicals Ltd (TIRUMALCHM.NS) is 16.6%.

The Cost of Equity of Thirumalai Chemicals Ltd (TIRUMALCHM.NS) is 16.95%.

The Cost of Debt of Thirumalai Chemicals Ltd (TIRUMALCHM.NS) is 20.65%.

	Range	Selected
Cost of equity	15.30% - 18.60%	16.95%
Tax rate	20.20% - 25.10%	22.65%
Cost of debt	14.40% - 26.90%	20.65%
WACC	14.1% - 19.1%	16.6%

WACC

TIRUMALCHM.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.02	1.15

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.30%	18.60%

Tax rate	20.20%	25.10%
Debt/Equity ratio	0.48	0.48
Cost of debt	14.40%	26.90%

After-tax WACC	14.1%	19.1%


Selected WACC	16.6%

TIRUMALCHM.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 TIRUMALCHM.NS:

cost_of_equity (16.95%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.02) + 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.