RANASUG.NS WACC - Weighted Average Cost of Capital

The WACC of Rana Sugars Ltd (RANASUG.NS) is 11.0%.

The Cost of Equity of Rana Sugars Ltd (RANASUG.NS) is 18.60%.

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

	Range	Selected
Cost of equity	16.70% - 20.50%	18.60%
Tax rate	22.00% - 22.50%	22.25%
Cost of debt	7.60% - 10.00%	8.80%
WACC	9.7% - 12.2%	11.0%

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	1.18	1.36

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.70%	20.50%

Tax rate	22.00%	22.50%
Debt/Equity ratio	1.86	1.86
Cost of debt	7.60%	10.00%

After-tax WACC	9.7%	12.2%


Selected WACC	11.0%

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 (18.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.18) + 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.