539112.BO
SAB Industries Ltd
Price:  
159 
INR
Volume:  
222
India | Construction

539112.BO WACC - Weighted Average Cost of Capital

The WACC of SAB Industries Ltd (539112.BO) is 11.2%.

The Cost of Equity of SAB Industries Ltd (539112.BO) is 11.2%.
The Cost of Debt of SAB Industries Ltd (539112.BO) is 11.6%.

RangeSelected
Cost of equity10.4% - 12.0%11.2%
Tax rate1.2% - 4.5%2.85%
Cost of debt7.8% - 15.4%11.6%
WACC9.7% - 12.7%11.2%
WACC

539112.BO WACC calculation

CategoryLowHigh
Long-term bond rate6.9%7.4%
Equity market risk premium8.3%9.3%
Adjusted beta0.420.44
Additional risk adjustments0.0%0.5%
Cost of equity10.4%12.0%
Tax rate1.2%4.5%
Debt/Equity ratio
0.350.35
Cost of debt7.8%15.4%
After-tax WACC9.7%12.7%
Selected WACC11.2%

539112.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 539112.BO:

cost_of_equity (11.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.42) + 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.