ZODIAC.NS WACC - Weighted Average Cost of Capital

The WACC of Zodiac Energy Ltd (ZODIAC.NS) is 12.0%.

The Cost of Equity of Zodiac Energy Ltd (ZODIAC.NS) is 13.50%.

The Cost of Debt of Zodiac Energy Ltd (ZODIAC.NS) is 8.30%.

	Range	Selected
Cost of equity	11.70% - 15.30%	13.50%
Tax rate	27.40% - 27.90%	27.65%
Cost of debt	8.30% - 8.30%	8.30%
WACC	10.6% - 13.4%	12.0%

WACC

ZODIAC.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.59	0.8

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.70%	15.30%

Tax rate	27.40%	27.90%
Debt/Equity ratio	0.25	0.25
Cost of debt	8.30%	8.30%

After-tax WACC	10.6%	13.4%


Selected WACC	12.0%

ZODIAC.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 ZODIAC.NS:

cost_of_equity (13.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.59) + 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.