ZODIACLOTH.NS WACC - Weighted Average Cost of Capital

The WACC of Zodiac Clothing Company Ltd (ZODIACLOTH.NS) is 11.4%.

The Cost of Equity of Zodiac Clothing Company Ltd (ZODIACLOTH.NS) is 12.65%.

The Cost of Debt of Zodiac Clothing Company Ltd (ZODIACLOTH.NS) is 7.65%.

	Range	Selected
Cost of equity	9.90% - 15.40%	12.65%
Tax rate	1.00% - 1.80%	1.40%
Cost of debt	7.00% - 8.30%	7.65%
WACC	9.2% - 13.6%	11.4%

WACC

ZODIACLOTH.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.37	0.81

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.90%	15.40%

Tax rate	1.00%	1.80%
Debt/Equity ratio	0.32	0.32
Cost of debt	7.00%	8.30%

After-tax WACC	9.2%	13.6%


Selected WACC	11.4%

ZODIACLOTH.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 ZODIACLOTH.NS:

cost_of_equity (12.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.37) + 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.