DEEPAKFERT.NS WACC - Weighted Average Cost of Capital

The WACC of Deepak Fertilisers and Petrochemicals Corp Ltd (DEEPAKFERT.NS) is 14.9%.

The Cost of Equity of Deepak Fertilisers and Petrochemicals Corp Ltd (DEEPAKFERT.NS) is 16.40%.

The Cost of Debt of Deepak Fertilisers and Petrochemicals Corp Ltd (DEEPAKFERT.NS) is 12.25%.

	Range	Selected
Cost of equity	14.60% - 18.20%	16.40%
Tax rate	29.00% - 31.10%	30.05%
Cost of debt	10.00% - 14.50%	12.25%
WACC	13.2% - 16.7%	14.9%

WACC

DEEPAKFERT.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	1.11

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.60%	18.20%

Tax rate	29.00%	31.10%
Debt/Equity ratio	0.23	0.23
Cost of debt	10.00%	14.50%

After-tax WACC	13.2%	16.7%


Selected WACC	14.9%

DEEPAKFERT.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 DEEPAKFERT.NS:

cost_of_equity (16.40%) = 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.