UNITECH.NS WACC - Weighted Average Cost of Capital

The WACC of Unitech Ltd (IN) (UNITECH.NS) is 6.5%.

The Cost of Equity of Unitech Ltd (IN) (UNITECH.NS) is 19.40%.

The Cost of Debt of Unitech Ltd (IN) (UNITECH.NS) is 4.25%.

	Range	Selected
Cost of equity	16.70% - 22.10%	19.40%
Tax rate	1.00% - 2.80%	1.90%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.9% - 7.1%	6.5%

WACC

UNITECH.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.19	1.53

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.70%	22.10%

Tax rate	1.00%	2.80%
Debt/Equity ratio	5.45	5.45
Cost of debt	4.00%	4.50%

After-tax WACC	5.9%	7.1%


Selected WACC	6.5%

UNITECH.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 UNITECH.NS:

cost_of_equity (19.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.19) + 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.