WHEELS.NS WACC - Weighted Average Cost of Capital

The WACC of Wheels India Ltd (WHEELS.NS) is 15.9%.

The Cost of Equity of Wheels India Ltd (WHEELS.NS) is 18.60%.

The Cost of Debt of Wheels India Ltd (WHEELS.NS) is 11.95%.

	Range	Selected
Cost of equity	17.20% - 20.00%	18.60%
Tax rate	23.20% - 24.30%	23.75%
Cost of debt	10.50% - 13.40%	11.95%
WACC	14.6% - 17.2%	15.9%

WACC

WHEELS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.25	1.31

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.20%	20.00%

Tax rate	23.20%	24.30%
Debt/Equity ratio	0.39	0.39
Cost of debt	10.50%	13.40%

After-tax WACC	14.6%	17.2%


Selected WACC	15.9%

WHEELS.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 WHEELS.NS:

cost_of_equity (18.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.25) + 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.