UNIVCABLES.NS WACC - Weighted Average Cost of Capital

The WACC of Universal Cables Ltd (UNIVCABLES.NS) is 17.5%.

The Cost of Equity of Universal Cables Ltd (UNIVCABLES.NS) is 20.10%.

The Cost of Debt of Universal Cables Ltd (UNIVCABLES.NS) is 12.10%.

	Range	Selected
Cost of equity	17.50% - 22.70%	20.10%
Tax rate	23.90% - 24.30%	24.10%
Cost of debt	12.10% - 12.10%	12.10%
WACC	15.5% - 19.5%	17.5%

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	1.28	1.6

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.50%	22.70%

Tax rate	23.90%	24.30%
Debt/Equity ratio	0.31	0.31
Cost of debt	12.10%	12.10%

After-tax WACC	15.5%	19.5%


Selected WACC	17.5%

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 (20.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.28) + 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.