ZUARI.NS WACC - Weighted Average Cost of Capital

The WACC of Zuari Agro Chemicals Ltd (ZUARI.NS) is 13.2%.

The Cost of Equity of Zuari Agro Chemicals Ltd (ZUARI.NS) is 23.90%.

The Cost of Debt of Zuari Agro Chemicals Ltd (ZUARI.NS) is 11.70%.

	Range	Selected
Cost of equity	19.50% - 28.30%	23.90%
Tax rate	27.90% - 36.90%	32.40%
Cost of debt	11.30% - 12.10%	11.70%
WACC	11.9% - 14.5%	13.2%

WACC

ZUARI.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.52	2.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	19.50%	28.30%

Tax rate	27.90%	36.90%
Debt/Equity ratio	2.01	2.01
Cost of debt	11.30%	12.10%

After-tax WACC	11.9%	14.5%


Selected WACC	13.2%

ZUARI.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 ZUARI.NS:

cost_of_equity (23.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.52) + 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.