KCP.NS WACC - Weighted Average Cost of Capital

The WACC of KCP Ltd (KCP.NS) is 14.1%.

The Cost of Equity of KCP Ltd (KCP.NS) is 16.35%.

The Cost of Debt of KCP Ltd (KCP.NS) is 7.50%.

	Range	Selected
Cost of equity	14.60% - 18.10%	16.35%
Tax rate	6.30% - 11.30%	8.80%
Cost of debt	7.40% - 7.60%	7.50%
WACC	12.8% - 15.4%	14.1%

WACC

KCP.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	1.1

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.60%	18.10%

Tax rate	6.30%	11.30%
Debt/Equity ratio	0.31	0.31
Cost of debt	7.40%	7.60%

After-tax WACC	12.8%	15.4%


Selected WACC	14.1%

KCP.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 KCP.NS:

cost_of_equity (16.35%) = 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.