KMSUGAR.NS WACC - Weighted Average Cost of Capital

The WACC of K M Sugar Mills Ltd (KMSUGAR.NS) is 10.5%.

The Cost of Equity of K M Sugar Mills Ltd (KMSUGAR.NS) is 16.10%.

The Cost of Debt of K M Sugar Mills Ltd (KMSUGAR.NS) is 7.70%.

	Range	Selected
Cost of equity	14.70% - 17.50%	16.10%
Tax rate	25.90% - 26.50%	26.20%
Cost of debt	6.80% - 8.60%	7.70%
WACC	9.5% - 11.5%	10.5%

WACC

KMSUGAR.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.95	1.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.70%	17.50%

Tax rate	25.90%	26.50%
Debt/Equity ratio	1.16	1.16
Cost of debt	6.80%	8.60%

After-tax WACC	9.5%	11.5%


Selected WACC	10.5%

KMSUGAR.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 KMSUGAR.NS:

cost_of_equity (16.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.95) + 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.