UNIVCABLES.NS WACC - Weighted Average Cost of Capital

The WACC of Universal Cables Ltd (UNIVCABLES.NS) is 16.8%.

The Cost of Equity of Universal Cables Ltd (UNIVCABLES.NS) is 20.50%.

The Cost of Debt of Universal Cables Ltd (UNIVCABLES.NS) is 11.60%.

	Range	Selected
Cost of equity	18.10% - 22.90%	20.50%
Tax rate	24.50% - 24.90%	24.70%
Cost of debt	11.10% - 12.10%	11.60%
WACC	15.1% - 18.6%	16.8%

WACC

UNIVCABLES.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.35	1.62

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.10%	22.90%

Tax rate	24.50%	24.90%
Debt/Equity ratio	0.45	0.45
Cost of debt	11.10%	12.10%

After-tax WACC	15.1%	18.6%


Selected WACC	16.8%

UNIVCABLES.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 UNIVCABLES.NS:

cost_of_equity (20.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.35) + 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.