WELCORP.NS WACC - Weighted Average Cost of Capital

The WACC of Welspun Corp Ltd (WELCORP.NS) is 16.0%.

The Cost of Equity of Welspun Corp Ltd (WELCORP.NS) is 16.25%.

The Cost of Debt of Welspun Corp Ltd (WELCORP.NS) is 9.75%.

	Range	Selected
Cost of equity	15.00% - 17.50%	16.25%
Tax rate	22.60% - 27.80%	25.20%
Cost of debt	7.60% - 11.90%	9.75%
WACC	14.7% - 17.3%	16.0%

WACC

WELCORP.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.98	1.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.00%	17.50%

Tax rate	22.60%	27.80%
Debt/Equity ratio	0.03	0.03
Cost of debt	7.60%	11.90%

After-tax WACC	14.7%	17.3%


Selected WACC	16.0%

WELCORP.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 WELCORP.NS:

cost_of_equity (16.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.98) + 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.