UBL.NS WACC - Weighted Average Cost of Capital

The WACC of United Breweries Ltd (UBL.NS) is 12.5%.

The Cost of Equity of United Breweries Ltd (UBL.NS) is 12.45%.

The Cost of Debt of United Breweries Ltd (UBL.NS) is 74.45%.

	Range	Selected
Cost of equity	11.20% - 13.70%	12.45%
Tax rate	26.30% - 26.60%	26.45%
Cost of debt	7.00% - 141.90%	74.45%
WACC	11.2% - 13.8%	12.5%

WACC

UBL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.52	0.63

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.20%	13.70%

Tax rate	26.30%	26.60%
Debt/Equity ratio	0	0
Cost of debt	7.00%	141.90%

After-tax WACC	11.2%	13.8%


Selected WACC	12.5%

UBL.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 UBL.NS:

cost_of_equity (12.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.52) + 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.