TOUCHWOOD.NS WACC - Weighted Average Cost of Capital

The WACC of Touchwood Entertainment Ltd (TOUCHWOOD.NS) is 13.1%.

The Cost of Equity of Touchwood Entertainment Ltd (TOUCHWOOD.NS) is 13.45%.

The Cost of Debt of Touchwood Entertainment Ltd (TOUCHWOOD.NS) is 10.75%.

	Range	Selected
Cost of equity	11.80% - 15.10%	13.45%
Tax rate	27.50% - 27.80%	27.65%
Cost of debt	7.50% - 14.00%	10.75%
WACC	11.4% - 14.8%	13.1%

WACC

TOUCHWOOD.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.59	0.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.80%	15.10%

Tax rate	27.50%	27.80%
Debt/Equity ratio	0.06	0.06
Cost of debt	7.50%	14.00%

After-tax WACC	11.4%	14.8%


Selected WACC	13.1%

TOUCHWOOD.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 TOUCHWOOD.NS:

cost_of_equity (13.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.59) + 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.