AVADHSUGAR.NS WACC - Weighted Average Cost of Capital

The WACC of Avadh Sugar & Energy Ltd (AVADHSUGAR.NS) is 11.0%.

The Cost of Equity of Avadh Sugar & Energy Ltd (AVADHSUGAR.NS) is 19.10%.

The Cost of Debt of Avadh Sugar & Energy Ltd (AVADHSUGAR.NS) is 8.25%.

	Range	Selected
Cost of equity	17.20% - 21.00%	19.10%
Tax rate	28.40% - 32.10%	30.25%
Cost of debt	6.50% - 10.00%	8.25%
WACC	9.6% - 12.4%	11.0%

WACC

AVADHSUGAR.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.24	1.41

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.20%	21.00%

Tax rate	28.40%	32.10%
Debt/Equity ratio	1.54	1.54
Cost of debt	6.50%	10.00%

After-tax WACC	9.6%	12.4%


Selected WACC	11.0%

AVADHSUGAR.NS'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 AVADHSUGAR.NS:

cost_of_equity (19.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.24) + 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.