UNICHEMLAB.NS WACC - Weighted Average Cost of Capital

The WACC of Unichem Laboratories Ltd (UNICHEMLAB.NS) is 15.1%.

The Cost of Equity of Unichem Laboratories Ltd (UNICHEMLAB.NS) is 16.10%.

The Cost of Debt of Unichem Laboratories Ltd (UNICHEMLAB.NS) is 6.80%.

	Range	Selected
Cost of equity	14.30% - 17.90%	16.10%
Tax rate	14.50% - 22.20%	18.35%
Cost of debt	6.00% - 7.60%	6.80%
WACC	13.4% - 16.7%	15.1%

WACC

UNICHEMLAB.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.9	1.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.30%	17.90%

Tax rate	14.50%	22.20%
Debt/Equity ratio	0.11	0.11
Cost of debt	6.00%	7.60%

After-tax WACC	13.4%	16.7%


Selected WACC	15.1%

UNICHEMLAB.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 UNICHEMLAB.NS:

cost_of_equity (16.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.9) + 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.