RAMCOSYS.NS WACC - Weighted Average Cost of Capital

The WACC of Ramco Systems Ltd (RAMCOSYS.NS) is 14.6%.

The Cost of Equity of Ramco Systems Ltd (RAMCOSYS.NS) is 14.90%.

The Cost of Debt of Ramco Systems Ltd (RAMCOSYS.NS) is 5.50%.

	Range	Selected
Cost of equity	11.60% - 18.20%	14.90%
Tax rate	4.10% - 15.50%	9.80%
Cost of debt	4.00% - 7.00%	5.50%
WACC	11.3% - 17.8%	14.6%

WACC

RAMCOSYS.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	1.11

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.60%	18.20%

Tax rate	4.10%	15.50%
Debt/Equity ratio	0.04	0.04
Cost of debt	4.00%	7.00%

After-tax WACC	11.3%	17.8%


Selected WACC	14.6%

RAMCOSYS.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 RAMCOSYS.NS:

cost_of_equity (14.90%) = 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.