RAMANEWS.NS WACC - Weighted Average Cost of Capital

The WACC of Shree Rama Newsprint Ltd (RAMANEWS.NS) is 9.5%.

The Cost of Equity of Shree Rama Newsprint Ltd (RAMANEWS.NS) is 13.55%.

The Cost of Debt of Shree Rama Newsprint Ltd (RAMANEWS.NS) is 6.05%.

	Range	Selected
Cost of equity	11.60% - 15.50%	13.55%
Tax rate	30.00% - 30.00%	30.00%
Cost of debt	4.00% - 8.10%	6.05%
WACC	7.8% - 11.2%	9.5%

WACC

RAMANEWS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.57	0.82

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.60%	15.50%

Tax rate	30.00%	30.00%
Debt/Equity ratio	0.75	0.75
Cost of debt	4.00%	8.10%

After-tax WACC	7.8%	11.2%


Selected WACC	9.5%

RAMANEWS.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 RAMANEWS.NS:

cost_of_equity (13.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.57) + 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.