WABCOINDIA.NS
Wabco India Ltd
Price:  
8,043.3 
INR
Volume:  
13,403
India | Auto Components

WABCOINDIA.NS WACC - Weighted Average Cost of Capital

The WACC of Wabco India Ltd (WABCOINDIA.NS) is 15.0%.

The Cost of Equity of Wabco India Ltd (WABCOINDIA.NS) is 15.05%.
The Cost of Debt of Wabco India Ltd (WABCOINDIA.NS) is 5%.

RangeSelected
Cost of equity13.7% - 16.4%15.05%
Tax rate28.9% - 29.9%29.4%
Cost of debt5.0% - 5.0%5%
WACC13.7% - 16.4%15.0%
WACC

WABCOINDIA.NS WACC calculation

CategoryLowHigh
Long-term bond rate7.5%8.0%
Equity market risk premium6.9%7.9%
Adjusted beta0.890.99
Additional risk adjustments0.0%0.5%
Cost of equity13.7%16.4%
Tax rate28.9%29.9%
Debt/Equity ratio
00
Cost of debt5.0%5.0%
After-tax WACC13.7%16.4%
Selected WACC15.0%

WABCOINDIA.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 WABCOINDIA.NS:

cost_of_equity (15.05%) = risk_free_rate (7.75%) + equity_risk_premium (7.40%) * adjusted_beta (0.89) + 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.