RANASUG.NS WACC - Weighted Average Cost of Capital

The WACC of Rana Sugars Ltd (RANASUG.NS) is 10.4%.

The Cost of Equity of Rana Sugars Ltd (RANASUG.NS) is 17.10%.

The Cost of Debt of Rana Sugars Ltd (RANASUG.NS) is 8.80%.

	Range	Selected
Cost of equity	15.10% - 19.10%	17.10%
Tax rate	14.20% - 22.40%	18.30%
Cost of debt	7.60% - 10.00%	8.80%
WACC	9.3% - 11.4%	10.4%

WACC

RANASUG.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1	1.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.10%	19.10%

Tax rate	14.20%	22.40%
Debt/Equity ratio	2.09	2.09
Cost of debt	7.60%	10.00%

After-tax WACC	9.3%	11.4%


Selected WACC	10.4%

RANASUG.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 RANASUG.NS:

cost_of_equity (17.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1) + 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.