MAGADSUGAR.NS WACC - Weighted Average Cost of Capital

The WACC of Magadh Sugar & Energy Ltd (MAGADSUGAR.NS) is 11.7%.

The Cost of Equity of Magadh Sugar & Energy Ltd (MAGADSUGAR.NS) is 16.55%.

The Cost of Debt of Magadh Sugar & Energy Ltd (MAGADSUGAR.NS) is 6.95%.

	Range	Selected
Cost of equity	14.80% - 18.30%	16.55%
Tax rate	28.80% - 32.40%	30.60%
Cost of debt	5.80% - 8.10%	6.95%
WACC	10.3% - 13.0%	11.7%

WACC

MAGADSUGAR.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	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.80%	18.30%

Tax rate	28.80%	32.40%
Debt/Equity ratio	0.71	0.71
Cost of debt	5.80%	8.10%

After-tax WACC	10.3%	13.0%


Selected WACC	11.7%

MAGADSUGAR.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 MAGADSUGAR.NS:

cost_of_equity (16.55%) = 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.