DHAMPURSUG.NS WACC - Weighted Average Cost of Capital

The WACC of Dhampur Sugar Mills Ltd (DHAMPURSUG.NS) is 8.5%.

The Cost of Equity of Dhampur Sugar Mills Ltd (DHAMPURSUG.NS) is 11.50%.

The Cost of Debt of Dhampur Sugar Mills Ltd (DHAMPURSUG.NS) is 7.75%.

	Range	Selected
Cost of equity	9.90% - 13.10%	11.50%
Tax rate	28.90% - 29.40%	29.15%
Cost of debt	5.50% - 10.00%	7.75%
WACC	6.9% - 10.0%	8.5%

WACC

DHAMPURSUG.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.36	0.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.90%	13.10%

Tax rate	28.90%	29.40%
Debt/Equity ratio	1.03	1.03
Cost of debt	5.50%	10.00%

After-tax WACC	6.9%	10.0%


Selected WACC	8.5%

DHAMPURSUG.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 DHAMPURSUG.NS:

cost_of_equity (11.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.36) + 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.