ALOKINDS.NS WACC - Weighted Average Cost of Capital

The WACC of Alok Industries Ltd (ALOKINDS.NS) is 9.3%.

The Cost of Equity of Alok Industries Ltd (ALOKINDS.NS) is 24.55%.

The Cost of Debt of Alok Industries Ltd (ALOKINDS.NS) is 5.50%.

	Range	Selected
Cost of equity	18.50% - 30.60%	24.55%
Tax rate	0.30% - 0.40%	0.35%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.9% - 11.7%	9.3%

WACC

ALOKINDS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.39	2.44

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.50%	30.60%

Tax rate	0.30%	0.40%
Debt/Equity ratio	3.96	3.96
Cost of debt	4.00%	7.00%

After-tax WACC	6.9%	11.7%


Selected WACC	9.3%

ALOKINDS.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 ALOKINDS.NS:

cost_of_equity (24.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.39) + 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.