ESTER.NS WACC - Weighted Average Cost of Capital

The WACC of Ester Industries Ltd (ESTER.NS) is 14.1%.

The Cost of Equity of Ester Industries Ltd (ESTER.NS) is 16.30%.

The Cost of Debt of Ester Industries Ltd (ESTER.NS) is 16.45%.

	Range	Selected
Cost of equity	14.20% - 18.40%	16.30%
Tax rate	21.70% - 36.70%	29.20%
Cost of debt	9.00% - 23.90%	16.45%
WACC	11.2% - 17.0%	14.1%

WACC

ESTER.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.88	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.20%	18.40%

Tax rate	21.70%	36.70%
Debt/Equity ratio	0.71	0.71
Cost of debt	9.00%	23.90%

After-tax WACC	11.2%	17.0%


Selected WACC	14.1%

ESTER.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 ESTER.NS:

cost_of_equity (16.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.88) + 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.