VADILALIND.NS WACC - Weighted Average Cost of Capital

The WACC of Vadilal Industries Ltd (VADILALIND.NS) is 14.0%.

The Cost of Equity of Vadilal Industries Ltd (VADILALIND.NS) is 14.40%.

The Cost of Debt of Vadilal Industries Ltd (VADILALIND.NS) is 8.85%.

	Range	Selected
Cost of equity	13.20% - 15.60%	14.40%
Tax rate	28.50% - 33.20%	30.85%
Cost of debt	7.50% - 10.20%	8.85%
WACC	12.8% - 15.2%	14.0%

WACC

VADILALIND.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.76	0.83

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.20%	15.60%

Tax rate	28.50%	33.20%
Debt/Equity ratio	0.05	0.05
Cost of debt	7.50%	10.20%

After-tax WACC	12.8%	15.2%


Selected WACC	14.0%

VADILALIND.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 VADILALIND.NS:

cost_of_equity (14.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.76) + 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.