VGUARD.NS WACC - Weighted Average Cost of Capital

The WACC of V Guard Industries Ltd (VGUARD.NS) is 16.8%.

The Cost of Equity of V Guard Industries Ltd (VGUARD.NS) is 16.95%.

The Cost of Debt of V Guard Industries Ltd (VGUARD.NS) is 15.50%.

	Range	Selected
Cost of equity	14.20% - 19.70%	16.95%
Tax rate	24.40% - 25.10%	24.75%
Cost of debt	7.50% - 23.50%	15.50%
WACC	14.0% - 19.7%	16.8%

WACC

VGUARD.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.88	1.27

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.20%	19.70%

Tax rate	24.40%	25.10%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.50%	23.50%

After-tax WACC	14.0%	19.7%


Selected WACC	16.8%

VGUARD.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 VGUARD.NS:

cost_of_equity (16.95%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.88) + 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.