VEDL.NS
Vedanta Ltd
Price:  
446.85 
INR
Volume:  
5,398,706.00
India | Metals & Mining
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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.