UTIAMC.NS WACC - Weighted Average Cost of Capital

The WACC of UTI Asset Management Company Ltd (UTIAMC.NS) is 14.7%.

The Cost of Equity of UTI Asset Management Company Ltd (UTIAMC.NS) is 14.80%.

The Cost of Debt of UTI Asset Management Company Ltd (UTIAMC.NS) is 8.45%.

	Range	Selected
Cost of equity	12.60% - 17.00%	14.80%
Tax rate	21.30% - 23.60%	22.45%
Cost of debt	7.50% - 9.40%	8.45%
WACC	12.5% - 16.8%	14.7%

WACC

UTIAMC.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.69	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.60%	17.00%

Tax rate	21.30%	23.60%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.50%	9.40%

After-tax WACC	12.5%	16.8%


Selected WACC	14.7%

UTIAMC.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 UTIAMC.NS:

cost_of_equity (14.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.69) + 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.