540686.BO WACC - Weighted Average Cost of Capital

The WACC of Smruthi Organics Ltd (540686.BO) is 15.3%.

The Cost of Equity of Smruthi Organics Ltd (540686.BO) is 15.95%.

The Cost of Debt of Smruthi Organics Ltd (540686.BO) is 13.00%.

	Range	Selected
Cost of equity	14.30% - 17.60%	15.95%
Tax rate	26.20% - 27.50%	26.85%
Cost of debt	8.60% - 17.40%	13.00%
WACC	13.5% - 17.1%	15.3%

WACC

540686.BO WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.9	1.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.30%	17.60%

Tax rate	26.20%	27.50%
Debt/Equity ratio	0.11	0.11
Cost of debt	8.60%	17.40%

After-tax WACC	13.5%	17.1%


Selected WACC	15.3%

540686.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 540686.BO:

cost_of_equity (15.95%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.9) + 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.