WEALTH.NS WACC - Weighted Average Cost of Capital

The WACC of Wealth First Portfolio Managers Ltd (WEALTH.NS) is 8.8%.

The Cost of Equity of Wealth First Portfolio Managers Ltd (WEALTH.NS) is 11.90%.

The Cost of Debt of Wealth First Portfolio Managers Ltd (WEALTH.NS) is 7.50%.

	Range	Selected
Cost of equity	10.50% - 13.30%	11.90%
Tax rate	23.50% - 24.00%	23.75%
Cost of debt	7.50% - 7.50%	7.50%
WACC	8.1% - 9.5%	8.8%

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	0.44	0.59

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.50%	13.30%

Tax rate	23.50%	24.00%
Debt/Equity ratio	1	1
Cost of debt	7.50%	7.50%

After-tax WACC	8.1%	9.5%


Selected WACC	8.8%

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 (11.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.44) + 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.