UCL.NS WACC - Weighted Average Cost of Capital

The WACC of Ushanti Colour Chem Ltd (UCL.NS) is 9.0%.

The Cost of Equity of Ushanti Colour Chem Ltd (UCL.NS) is 13.90%.

The Cost of Debt of Ushanti Colour Chem Ltd (UCL.NS) is 5.50%.

	Range	Selected
Cost of equity	12.60% - 15.20%	13.90%
Tax rate	35.30% - 41.20%	38.25%
Cost of debt	4.00% - 7.00%	5.50%
WACC	7.9% - 10.0%	9.0%

WACC

UCL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.69	0.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.60%	15.20%

Tax rate	35.30%	41.20%
Debt/Equity ratio	0.88	0.88
Cost of debt	4.00%	7.00%

After-tax WACC	7.9%	10.0%


Selected WACC	9.0%

UCL.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 UCL.NS:

cost_of_equity (13.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.69) + 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.