TRIL.NS WACC - Weighted Average Cost of Capital

The WACC of Transformers and Rectifiers (India) Ltd (TRIL.NS) is 16.5%.

The Cost of Equity of Transformers and Rectifiers (India) Ltd (TRIL.NS) is 16.60%.

The Cost of Debt of Transformers and Rectifiers (India) Ltd (TRIL.NS) is 12.95%.

	Range	Selected
Cost of equity	14.50% - 18.70%	16.60%
Tax rate	25.50% - 26.30%	25.90%
Cost of debt	7.90% - 18.00%	12.95%
WACC	14.3% - 18.6%	16.5%

WACC

TRIL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.92	1.16

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.50%	18.70%

Tax rate	25.50%	26.30%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.90%	18.00%

After-tax WACC	14.3%	18.6%


Selected WACC	16.5%

TRIL.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 TRIL.NS:

cost_of_equity (16.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.92) + 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.