The WACC of Swarnsarita Gems Ltd (526365.BO) is 10.8%.
Range | Selected | |
Cost of equity | 15.0% - 19.6% | 17.3% |
Tax rate | 27.4% - 28.9% | 28.15% |
Cost of debt | 6.4% - 10.5% | 8.45% |
WACC | 9.0% - 12.6% | 10.8% |
Category | Low | High |
Long-term bond rate | 6.9% | 7.4% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 0.98 | 1.27 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 15.0% | 19.6% |
Tax rate | 27.4% | 28.9% |
Debt/Equity ratio | 1.37 | 1.37 |
Cost of debt | 6.4% | 10.5% |
After-tax WACC | 9.0% | 12.6% |
Selected WACC | 10.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
526365.BO | Swarnsarita Gems Ltd | 1.37 | 1.07 | 0.54 |
540936.BO | Gautam Gems Ltd | 0.2 | -0.93 | -0.81 |
541967.BO | Sky Gold Ltd | 0.38 | 0.93 | 0.73 |
AARVEEDEN.NS | Aarvee Denims and Exports Ltd | 0.75 | -0.22 | -0.14 |
BHANDARI.NS | Bhandari Hosiery Exports Ltd | 0.89 | 1.28 | 0.78 |
BIL.NS | Bhartiya International Ltd | 0.45 | 0.55 | 0.42 |
INDTERRAIN.NS | Indian Terrain Fashions Ltd | 0.71 | 1.42 | 0.94 |
KANANIIND.NS | Kanani Industries Ltd | 0 | -0.09 | -0.09 |
KDDL.NS | KDDL Ltd | 0.07 | 1.11 | 1.06 |
SPAL.NS | S. P. Apparels Ltd | 0.18 | 0.73 | 0.65 |
Low | High | |
Unlevered beta | 0.49 | 0.68 |
Relevered beta | 0.97 | 1.4 |
Adjusted relevered beta | 0.98 | 1.27 |
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 526365.BO:
cost_of_equity (17.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.98) + 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.