WEALTH.NS WACC - Weighted Average Cost of Capital

The WACC of Wealth First Portfolio Managers Ltd (WEALTH.NS) is 12.5%.

The Cost of Equity of Wealth First Portfolio Managers Ltd (WEALTH.NS) is 12.50%.

The Cost of Debt of Wealth First Portfolio Managers Ltd (WEALTH.NS) is 13.45%.

	Range	Selected
Cost of equity	11.20% - 13.80%	12.50%
Tax rate	30.20% - 30.60%	30.40%
Cost of debt	7.50% - 19.40%	13.45%
WACC	11.2% - 13.8%	12.5%

WACC

WEALTH.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.53	0.63

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.20%	13.80%

Tax rate	30.20%	30.60%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.50%	19.40%

After-tax WACC	11.2%	13.8%


Selected WACC	12.5%

WEALTH.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 WEALTH.NS:

cost_of_equity (12.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.53) + 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.