What is Cost of Equity of TATA POWER Company

Limited?
Cost of Equity = Rf + (Rm-Rf)
Rf = Risk free return
Rm = Market return
= beta
Risk-free rate of return
Beta
Market rate of return
Cost of Equity

7.728
1.53
11.97
14.2183

The cost of equity is the rate of return required by the

company's ordinary shareholders in order for that investor to
bear the risk of holding that company's shares. The return
consists both of dividend and capital gains

Cost of equity of TATA POWER Company LTD is

14.2183 which represents the compensation that the market
demands in exchange for owning the asset and bearing the
risk of ownership.

What is Cost of Debt of TATA POWER Company

Limited?
Cost of Debt= Nominal rate*(1- corporate tax rate)
Nominal Rate
Corporate tax rate= (Tax/PBT)*100
Nominal rate

16.65

corporate tax rate

0.308

Cost of Debt

11.5218

The effective rate that a company pays on its current debt.

Company will use various bonds, loans and other forms of
debt, so this measure is useful for giving an idea as to the
overall rate being paid by the company to use debt
financing.

Cost of Debt of TATA POWER Company LTD is 11.5218

which also give investors an idea as to the riskiness of the
company compared to others, because riskier companies
generally have a higher cost of debt.

What is the equity value per share?

How does it compare with that of Historical market value
of share?
Equity value per share= shares holder fund/ no. of equity share
Year shareholder fund(in crs) no. of equity share Equity value
2011

11,239.99

23.73crs

473.647

2012

11,821.01

237.30crs

49.813

2013

12,260.85

237.30crs

51.666

2014

13,127.36

237.30crs

55.317

Market value per share

Year
Market value of share
2011
133.75
2012
131.78
2013
84.2
2014
106.49

TATA POWER
500
0

2011

2012

2013

2014

Equity value per share

Market value per share