506642.BO WACC - Weighted Average Cost of Capital

The WACC of Sadhana Nitro Chem Ltd (506642.BO) is 12.8%.

The Cost of Equity of Sadhana Nitro Chem Ltd (506642.BO) is 12.75%.

The Cost of Debt of Sadhana Nitro Chem Ltd (506642.BO) is 18.25%.

	Range	Selected
Cost of equity	11.10% - 14.40%	12.75%
Tax rate	23.30% - 29.50%	26.40%
Cost of debt	10.20% - 26.30%	18.25%
WACC	11.0% - 14.6%	12.8%

WACC

506642.BO WACC calculation

Category	Low	High

Long-term bond rate	7.4%	7.9%
Equity market risk premium	6.9%	7.9%
Adjusted beta	0.53	0.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.10%	14.40%

Tax rate	23.30%	29.50%
Debt/Equity ratio	0.04	0.04
Cost of debt	10.20%	26.30%

After-tax WACC	11.0%	14.6%


Selected WACC	12.8%

506642.BO'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 506642.BO:

cost_of_equity (12.75%) = risk_free_rate (7.65%) + equity_risk_premium (7.40%) * adjusted_beta (0.53) + 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.