ZUARI.NS WACC - Weighted Average Cost of Capital

The WACC of Zuari Agro Chemicals Ltd (ZUARI.NS) is 13.4%.

The Cost of Equity of Zuari Agro Chemicals Ltd (ZUARI.NS) is 25.80%.

The Cost of Debt of Zuari Agro Chemicals Ltd (ZUARI.NS) is 9.65%.

	Range	Selected
Cost of equity	21.60% - 30.00%	25.80%
Tax rate	23.10% - 27.00%	25.05%
Cost of debt	8.80% - 10.50%	9.65%
WACC	11.7% - 15.1%	13.4%

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	1.77	2.37

Additional risk adjustments	0.0%	0.5%
Cost of equity	21.60%	30.00%

Tax rate	23.10%	27.00%
Debt/Equity ratio	2.01	2.01
Cost of debt	8.80%	10.50%

After-tax WACC	11.7%	15.1%


Selected WACC	13.4%

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 (25.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.77) + 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.