DECCANCE.NS WACC - Weighted Average Cost of Capital

The WACC of Deccan Cements Ltd (DECCANCE.NS) is 10.9%.

The Cost of Equity of Deccan Cements Ltd (DECCANCE.NS) is 15.80%.

The Cost of Debt of Deccan Cements Ltd (DECCANCE.NS) is 7.00%.

	Range	Selected
Cost of equity	14.00% - 17.60%	15.80%
Tax rate	26.00% - 27.60%	26.80%
Cost of debt	5.70% - 8.30%	7.00%
WACC	9.5% - 12.2%	10.9%

WACC

DECCANCE.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.86	1.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.00%	17.60%

Tax rate	26.00%	27.60%
Debt/Equity ratio	0.86	0.86
Cost of debt	5.70%	8.30%

After-tax WACC	9.5%	12.2%


Selected WACC	10.9%

DECCANCE.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 DECCANCE.NS:

cost_of_equity (15.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.86) + 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.