534618.BO WACC - Weighted Average Cost of Capital

The WACC of Sangam Renewables Ltd (534618.BO) is 14.3%.

The Cost of Equity of Sangam Renewables Ltd (534618.BO) is 14.35%.

The Cost of Debt of Sangam Renewables Ltd (534618.BO) is 18.05%.

	Range	Selected
Cost of equity	12.50% - 16.20%	14.35%
Tax rate	25.30% - 26.50%	25.90%
Cost of debt	7.50% - 28.60%	18.05%
WACC	12.4% - 16.3%	14.3%

WACC

534618.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.67	0.9

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.50%	16.20%

Tax rate	25.30%	26.50%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.50%	28.60%

After-tax WACC	12.4%	16.3%


Selected WACC	14.3%

534618.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 534618.BO:

cost_of_equity (14.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.67) + 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.