526117.BO
Shervani Industrial Syndicate Ltd
Price:  
409 
INR
Volume:  
74
India | Real Estate Management & Development

526117.BO WACC - Weighted Average Cost of Capital

The WACC of Shervani Industrial Syndicate Ltd (526117.BO) is 12.0%.

The Cost of Equity of Shervani Industrial Syndicate Ltd (526117.BO) is 12.9%.
The Cost of Debt of Shervani Industrial Syndicate Ltd (526117.BO) is 10.15%.

RangeSelected
Cost of equity11.3% - 14.5%12.9%
Tax rate7.6% - 13.5%10.55%
Cost of debt7.0% - 13.3%10.15%
WACC10.2% - 13.8%12.0%
WACC

526117.BO WACC calculation

CategoryLowHigh
Long-term bond rate6.9%7.4%
Equity market risk premium8.3%9.3%
Adjusted beta0.540.71
Additional risk adjustments0.0%0.5%
Cost of equity11.3%14.5%
Tax rate7.6%13.5%
Debt/Equity ratio
0.30.3
Cost of debt7.0%13.3%
After-tax WACC10.2%13.8%
Selected WACC12.0%

526117.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 526117.BO:

cost_of_equity (12.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.54) + 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.