VEDL.NS WACC - Weighted Average Cost of Capital

The WACC of Vedanta Ltd (VEDL.NS) is 15.2%.

The Cost of Equity of Vedanta Ltd (VEDL.NS) is 18.15%.

The Cost of Debt of Vedanta Ltd (VEDL.NS) is 11.10%.

	Range	Selected
Cost of equity	16.20% - 20.10%	18.15%
Tax rate	25.20% - 28.20%	26.70%
Cost of debt	9.10% - 13.10%	11.10%
WACC	13.4% - 16.9%	15.2%

WACC

VEDL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.12	1.31

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.20%	20.10%

Tax rate	25.20%	28.20%
Debt/Equity ratio	0.42	0.42
Cost of debt	9.10%	13.10%

After-tax WACC	13.4%	16.9%


Selected WACC	15.2%

VEDL.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 VEDL.NS:

cost_of_equity (18.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.12) + 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.