540143.BO WACC - Weighted Average Cost of Capital

The WACC of Sagarsoft (India) Ltd (540143.BO) is 12.3%.

The Cost of Equity of Sagarsoft (India) Ltd (540143.BO) is 12.90%.

The Cost of Debt of Sagarsoft (India) Ltd (540143.BO) is 7.50%.

	Range	Selected
Cost of equity	11.30% - 14.50%	12.90%
Tax rate	26.60% - 26.70%	26.65%
Cost of debt	7.50% - 7.50%	7.50%
WACC	10.9% - 13.8%	12.3%

WACC

540143.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.54	0.71

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.30%	14.50%

Tax rate	26.60%	26.70%
Debt/Equity ratio	0.09	0.09
Cost of debt	7.50%	7.50%

After-tax WACC	10.9%	13.8%


Selected WACC	12.3%

540143.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 540143.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.