CHEMBOND.NS WACC - Weighted Average Cost of Capital

The WACC of Chembond Chemicals Ltd (CHEMBOND.NS) is 15.5%.

The Cost of Equity of Chembond Chemicals Ltd (CHEMBOND.NS) is 15.55%.

The Cost of Debt of Chembond Chemicals Ltd (CHEMBOND.NS) is 20.15%.

	Range	Selected
Cost of equity	13.90% - 17.20%	15.55%
Tax rate	25.90% - 27.00%	26.45%
Cost of debt	7.00% - 33.30%	20.15%
WACC	13.8% - 17.2%	15.5%

WACC

CHEMBOND.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.85	1

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.90%	17.20%

Tax rate	25.90%	27.00%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.00%	33.30%

After-tax WACC	13.8%	17.2%


Selected WACC	15.5%

CHEMBOND.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 CHEMBOND.NS:

cost_of_equity (15.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.85) + 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.