WABAG.NS WACC - Weighted Average Cost of Capital

The WACC of Va Tech Wabag Ltd (WABAG.NS) is 11.7%.

The Cost of Equity of Va Tech Wabag Ltd (WABAG.NS) is 11.80%.

The Cost of Debt of Va Tech Wabag Ltd (WABAG.NS) is 7.00%.

	Range	Selected
Cost of equity	10.20% - 13.40%	11.80%
Tax rate	23.00% - 23.60%	23.30%
Cost of debt	6.50% - 7.50%	7.00%
WACC	10.1% - 13.2%	11.7%

WACC

WABAG.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.4	0.59

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.20%	13.40%

Tax rate	23.00%	23.60%
Debt/Equity ratio	0.02	0.02
Cost of debt	6.50%	7.50%

After-tax WACC	10.1%	13.2%


Selected WACC	11.7%

WABAG.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 WABAG.NS:

cost_of_equity (11.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.4) + 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.