WOCKPHARMA.NS WACC - Weighted Average Cost of Capital

The WACC of Wockhardt Ltd (WOCKPHARMA.NS) is 12.2%.

The Cost of Equity of Wockhardt Ltd (WOCKPHARMA.NS) is 12.75%.

The Cost of Debt of Wockhardt Ltd (WOCKPHARMA.NS) is 9.45%.

	Range	Selected
Cost of equity	11.90% - 13.60%	12.75%
Tax rate	24.20% - 38.40%	31.30%
Cost of debt	8.40% - 10.50%	9.45%
WACC	11.4% - 13.0%	12.2%

WACC

WOCKPHARMA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.6	0.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.90%	13.60%

Tax rate	24.20%	38.40%
Debt/Equity ratio	0.09	0.09
Cost of debt	8.40%	10.50%

After-tax WACC	11.4%	13.0%


Selected WACC	12.2%

WOCKPHARMA.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 WOCKPHARMA.NS:

cost_of_equity (12.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.6) + 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.