538795.BO WACC - Weighted Average Cost of Capital

The WACC of Shree Ajit Pulp and Paper Ltd (538795.BO) is 12.6%.

The Cost of Equity of Shree Ajit Pulp and Paper Ltd (538795.BO) is 15.75%.

The Cost of Debt of Shree Ajit Pulp and Paper Ltd (538795.BO) is 14.30%.

	Range	Selected
Cost of equity	14.10% - 17.40%	15.75%
Tax rate	27.50% - 28.70%	28.10%
Cost of debt	12.10% - 16.50%	14.30%
WACC	11.1% - 14.2%	12.6%

WACC

538795.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.87	1.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.10%	17.40%

Tax rate	27.50%	28.70%
Debt/Equity ratio	1.34	1.34
Cost of debt	12.10%	16.50%

After-tax WACC	11.1%	14.2%


Selected WACC	12.6%

538795.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 538795.BO:

cost_of_equity (15.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.87) + 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.