VIKASWSP.NS WACC - Weighted Average Cost of Capital

The WACC of Vikas WSP Ltd (VIKASWSP.NS) is 6.8%.

The Cost of Equity of Vikas WSP Ltd (VIKASWSP.NS) is 37.15%.

The Cost of Debt of Vikas WSP Ltd (VIKASWSP.NS) is 4.25%.

	Range	Selected
Cost of equity	26.00% - 48.30%	37.15%
Tax rate	8.80% - 11.50%	10.15%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.6% - 7.9%	6.8%

WACC

VIKASWSP.NS WACC calculation

Category	Low	High

Long-term bond rate	7.2%	7.7%
Equity market risk premium	8.3%	9.3%
Adjusted beta	2.26	4.31

Additional risk adjustments	0.0%	0.5%
Cost of equity	26.00%	48.30%

Tax rate	8.80%	11.50%
Debt/Equity ratio	10.35	10.35
Cost of debt	4.00%	4.50%

After-tax WACC	5.6%	7.9%


Selected WACC	6.8%

VIKASWSP.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 VIKASWSP.NS:

cost_of_equity (37.15%) = risk_free_rate (7.45%) + equity_risk_premium (8.80%) * adjusted_beta (2.26) + 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.