UNICHEMLAB.NS WACC - Weighted Average Cost of Capital

The WACC of Unichem Laboratories Ltd (UNICHEMLAB.NS) is 15.6%.

The Cost of Equity of Unichem Laboratories Ltd (UNICHEMLAB.NS) is 16.35%.

The Cost of Debt of Unichem Laboratories Ltd (UNICHEMLAB.NS) is 6.20%.

	Range	Selected
Cost of equity	14.90% - 17.80%	16.35%
Tax rate	20.80% - 28.30%	24.55%
Cost of debt	4.50% - 7.90%	6.20%
WACC	14.3% - 17.0%	15.6%

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	0.97	1.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.90%	17.80%

Tax rate	20.80%	28.30%
Debt/Equity ratio	0.06	0.06
Cost of debt	4.50%	7.90%

After-tax WACC	14.3%	17.0%


Selected WACC	15.6%

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 (16.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.97) + 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.