KCPSUGIND.NS WACC - Weighted Average Cost of Capital

The WACC of KCP Sugar and Industries Corp Ltd (KCPSUGIND.NS) is 12.5%.

The Cost of Equity of KCP Sugar and Industries Corp Ltd (KCPSUGIND.NS) is 14.95%.

The Cost of Debt of KCP Sugar and Industries Corp Ltd (KCPSUGIND.NS) is 9.75%.

	Range	Selected
Cost of equity	13.30% - 16.60%	14.95%
Tax rate	25.30% - 32.90%	29.10%
Cost of debt	7.40% - 12.10%	9.75%
WACC	11.0% - 14.1%	12.5%

WACC

KCPSUGIND.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.78	0.94

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.30%	16.60%

Tax rate	25.30%	32.90%
Debt/Equity ratio	0.43	0.43
Cost of debt	7.40%	12.10%

After-tax WACC	11.0%	14.1%


Selected WACC	12.5%

KCPSUGIND.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 KCPSUGIND.NS:

cost_of_equity (14.95%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.78) + 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.