TNPL.NS WACC - Weighted Average Cost of Capital

The WACC of Tamilnadu Newsprint & Papers Ltd (TNPL.NS) is 15.1%.

The Cost of Equity of Tamilnadu Newsprint & Papers Ltd (TNPL.NS) is 20.70%.

The Cost of Debt of Tamilnadu Newsprint & Papers Ltd (TNPL.NS) is 17.20%.

	Range	Selected
Cost of equity	19.00% - 22.40%	20.70%
Tax rate	34.60% - 35.30%	34.95%
Cost of debt	10.50% - 23.90%	17.20%
WACC	11.8% - 18.3%	15.1%

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	1.46	1.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	19.00%	22.40%

Tax rate	34.60%	35.30%
Debt/Equity ratio	1.44	1.44
Cost of debt	10.50%	23.90%

After-tax WACC	11.8%	18.3%


Selected WACC	15.1%

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 (20.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.46) + 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.