TVSELECT.NS WACC - Weighted Average Cost of Capital

The WACC of TVS Electronics Ltd (TVSELECT.NS) is 12.1%.

The Cost of Equity of TVS Electronics Ltd (TVSELECT.NS) is 12.10%.

The Cost of Debt of TVS Electronics Ltd (TVSELECT.NS) is 17.70%.

	Range	Selected
Cost of equity	11.10% - 13.10%	12.10%
Tax rate	26.20% - 27.10%	26.65%
Cost of debt	8.50% - 26.90%	17.70%
WACC	10.8% - 13.5%	12.1%

WACC

TVSELECT.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.51	0.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.10%	13.10%

Tax rate	26.20%	27.10%
Debt/Equity ratio	0.05	0.05
Cost of debt	8.50%	26.90%

After-tax WACC	10.8%	13.5%


Selected WACC	12.1%

TVSELECT.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 TVSELECT.NS:

cost_of_equity (12.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.51) + 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.