RALLIS.NS WACC - Weighted Average Cost of Capital

The WACC of Rallis India Ltd (RALLIS.NS) is 15.7%.

The Cost of Equity of Rallis India Ltd (RALLIS.NS) is 15.90%.

The Cost of Debt of Rallis India Ltd (RALLIS.NS) is 7.65%.

	Range	Selected
Cost of equity	14.50% - 17.30%	15.90%
Tax rate	26.30% - 27.10%	26.70%
Cost of debt	7.50% - 7.80%	7.65%
WACC	14.3% - 17.1%	15.7%

WACC

RALLIS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.91	1.01

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.50%	17.30%

Tax rate	26.30%	27.10%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.50%	7.80%

After-tax WACC	14.3%	17.1%


Selected WACC	15.7%

RALLIS.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 RALLIS.NS:

cost_of_equity (15.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.91) + 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.