UTIAMC.NS WACC - Weighted Average Cost of Capital

The WACC of UTI Asset Management Company Ltd (UTIAMC.NS) is 13.6%.

The Cost of Equity of UTI Asset Management Company Ltd (UTIAMC.NS) is 13.75%.

The Cost of Debt of UTI Asset Management Company Ltd (UTIAMC.NS) is 7.25%.

	Range	Selected
Cost of equity	11.50% - 16.00%	13.75%
Tax rate	18.90% - 20.50%	19.70%
Cost of debt	7.00% - 7.50%	7.25%
WACC	11.4% - 15.9%	13.6%

WACC

UTIAMC.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.55	0.87

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	16.00%

Tax rate	18.90%	20.50%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.00%	7.50%

After-tax WACC	11.4%	15.9%


Selected WACC	13.6%

UTIAMC.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 UTIAMC.NS:

cost_of_equity (13.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.55) + 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.