CONFIPET.NS WACC - Weighted Average Cost of Capital

The WACC of Confidence Petroleum India Ltd (CONFIPET.NS) is 14.9%.

The Cost of Equity of Confidence Petroleum India Ltd (CONFIPET.NS) is 16.45%.

The Cost of Debt of Confidence Petroleum India Ltd (CONFIPET.NS) is 12.75%.

	Range	Selected
Cost of equity	14.60% - 18.30%	16.45%
Tax rate	24.80% - 25.50%	25.15%
Cost of debt	9.10% - 16.40%	12.75%
WACC	12.8% - 16.9%	14.9%

WACC

CONFIPET.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.93	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.60%	18.30%

Tax rate	24.80%	25.50%
Debt/Equity ratio	0.3	0.3
Cost of debt	9.10%	16.40%

After-tax WACC	12.8%	16.9%


Selected WACC	14.9%

CONFIPET.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 CONFIPET.NS:

cost_of_equity (16.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.93) + 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.