MAGADSUGAR.NS WACC - Weighted Average Cost of Capital

The WACC of Magadh Sugar & Energy Ltd (MAGADSUGAR.NS) is 11.5%.

The Cost of Equity of Magadh Sugar & Energy Ltd (MAGADSUGAR.NS) is 16.10%.

The Cost of Debt of Magadh Sugar & Energy Ltd (MAGADSUGAR.NS) is 7.25%.

	Range	Selected
Cost of equity	13.90% - 18.30%	16.10%
Tax rate	28.70% - 32.40%	30.55%
Cost of debt	6.40% - 8.10%	7.25%
WACC	10.1% - 13.0%	11.5%

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	0.85	1.12

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.90%	18.30%

Tax rate	28.70%	32.40%
Debt/Equity ratio	0.69	0.69
Cost of debt	6.40%	8.10%

After-tax WACC	10.1%	13.0%


Selected WACC	11.5%

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 (16.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.85) + 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.