TNPL.NS WACC - Weighted Average Cost of Capital

The WACC of Tamilnadu Newsprint & Papers Ltd (TNPL.NS) is 13.8%.

The Cost of Equity of Tamilnadu Newsprint & Papers Ltd (TNPL.NS) is 23.00%.

The Cost of Debt of Tamilnadu Newsprint & Papers Ltd (TNPL.NS) is 14.35%.

	Range	Selected
Cost of equity	20.80% - 25.20%	23.00%
Tax rate	34.60% - 35.30%	34.95%
Cost of debt	10.10% - 18.60%	14.35%
WACC	11.2% - 16.4%	13.8%

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	1.68	1.86

Additional risk adjustments	0.0%	0.5%
Cost of equity	20.80%	25.20%

Tax rate	34.60%	35.30%
Debt/Equity ratio	2.05	2.05
Cost of debt	10.10%	18.60%

After-tax WACC	11.2%	16.4%


Selected WACC	13.8%

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 (23.00%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.68) + 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.