VEDL.NS WACC - Weighted Average Cost of Capital
The WACC of Vedanta Ltd (VEDL.NS) is 15.2%.
| Range | Selected | |
| Cost of equity | 16.3% - 20.1% | 18.2% |
| Tax rate | 25.2% - 28.2% | 26.7% |
| Cost of debt | 9.1% - 13.1% | 11.1% |
| WACC | 13.4% - 16.9% | 15.2% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 1.13 | 1.32 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 16.3% | 20.1% |
| Tax rate | 25.2% | 28.2% |
| Debt/Equity ratio | 0.43 | 0.43 |
| Cost of debt | 9.1% | 13.1% |
| After-tax WACC | 13.4% | 16.9% |
| Selected WACC | 15.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VEDL.NS | Vedanta Ltd | 0.43 | 1.65 | 1.26 |
| 010130.KS | Korea Zinc Inc | 0.33 | 0.04 | 0.03 |
| 1258.HK | China Nonferrous Mining Corp Ltd | 0.06 | 1.19 | 1.14 |
| 5711.T | Mitsubishi Materials Corp | 2 | 1.11 | 0.45 |
| 5713.T | Sumitomo Metal Mining Co Ltd | 0.58 | 1.59 | 1.12 |
| GRAVITA.NS | Gravita India Ltd | 0.04 | 1.84 | 1.79 |
| HINDALCO.NS | Hindalco Industries Ltd | 0.43 | 0.97 | 0.74 |
| JSWSTEEL.NS | JSW Steel Ltd | 0.36 | 0.98 | 0.77 |
| S32.AX | South32 Ltd | 0.18 | 1.35 | 1.19 |
| SAIL.NS | Steel Authority of India Ltd | 0.69 | 1.5 | 1 |
| Low | High | |
| Unlevered beta | 0.91 | 1.13 |
| Relevered beta | 1.19 | 1.48 |
| Adjusted relevered beta | 1.13 | 1.32 |
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 (18.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.13) + 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.