TNPL.NS WACC - Weighted Average Cost of Capital

The WACC of Tamilnadu Newsprint & Papers Ltd (TNPL.NS) is 14.2%.

The Cost of Equity of Tamilnadu Newsprint & Papers Ltd (TNPL.NS) is 20.60%.

The Cost of Debt of Tamilnadu Newsprint & Papers Ltd (TNPL.NS) is 14.55%.

	Range	Selected
Cost of equity	18.90% - 22.30%	20.60%
Tax rate	34.60% - 35.30%	34.95%
Cost of debt	10.50% - 18.60%	14.55%
WACC	11.9% - 16.4%	14.2%

WACC

TNPL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.45	1.55

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.90%	22.30%

Tax rate	34.60%	35.30%
Debt/Equity ratio	1.37	1.37
Cost of debt	10.50%	18.60%

After-tax WACC	11.9%	16.4%


Selected WACC	14.2%

TNPL.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 TNPL.NS:

cost_of_equity (20.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.45) + 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.