VEDL.NS WACC - Weighted Average Cost of Capital

The WACC of Vedanta Ltd (VEDL.NS) is 15.1%.

The Cost of Equity of Vedanta Ltd (VEDL.NS) is 17.30%.

The Cost of Debt of Vedanta Ltd (VEDL.NS) is 10.65%.

	Range	Selected
Cost of equity	15.70% - 18.90%	17.30%
Tax rate	25.20% - 28.20%	26.70%
Cost of debt	9.10% - 12.20%	10.65%
WACC	13.7% - 16.6%	15.1%

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	1.07	1.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.70%	18.90%

Tax rate	25.20%	28.20%
Debt/Equity ratio	0.3	0.3
Cost of debt	9.10%	12.20%

After-tax WACC	13.7%	16.6%


Selected WACC	15.1%

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 (17.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.07) + 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.