VESUVIUS.NS WACC - Weighted Average Cost of Capital

The WACC of Vesuvius India Ltd (VESUVIUS.NS) is 16.1%.

The Cost of Equity of Vesuvius India Ltd (VESUVIUS.NS) is 16.15%.

The Cost of Debt of Vesuvius India Ltd (VESUVIUS.NS) is 7.50%.

	Range	Selected
Cost of equity	14.70% - 17.60%	16.15%
Tax rate	25.50% - 25.60%	25.55%
Cost of debt	7.50% - 7.50%	7.50%
WACC	14.7% - 17.5%	16.1%

WACC

VESUVIUS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.94	1.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.70%	17.60%

Tax rate	25.50%	25.60%
Debt/Equity ratio	0	0
Cost of debt	7.50%	7.50%

After-tax WACC	14.7%	17.5%


Selected WACC	16.1%

VESUVIUS.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 VESUVIUS.NS:

cost_of_equity (16.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.94) + 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.