TVSSRICHAK.NS WACC - Weighted Average Cost of Capital

The WACC of TVS Srichakra Ltd (TVSSRICHAK.NS) is 14.2%.

The Cost of Equity of TVS Srichakra Ltd (TVSSRICHAK.NS) is 16.50%.

The Cost of Debt of TVS Srichakra Ltd (TVSSRICHAK.NS) is 10.35%.

	Range	Selected
Cost of equity	14.50% - 18.50%	16.50%
Tax rate	25.50% - 26.40%	25.95%
Cost of debt	8.60% - 12.10%	10.35%
WACC	12.4% - 15.9%	14.2%

WACC

TVSSRICHAK.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	1.14

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.50%	18.50%

Tax rate	25.50%	26.40%
Debt/Equity ratio	0.36	0.36
Cost of debt	8.60%	12.10%

After-tax WACC	12.4%	15.9%


Selected WACC	14.2%

TVSSRICHAK.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 TVSSRICHAK.NS:

cost_of_equity (16.50%) = 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.