RENUKA.NS WACC - Weighted Average Cost of Capital

The WACC of Shree Renuka Sugars Ltd (RENUKA.NS) is 18.1%.

The Cost of Equity of Shree Renuka Sugars Ltd (RENUKA.NS) is 22.20%.

The Cost of Debt of Shree Renuka Sugars Ltd (RENUKA.NS) is 16.80%.

	Range	Selected
Cost of equity	20.40% - 24.00%	22.20%
Tax rate	14.20% - 24.70%	19.45%
Cost of debt	9.70% - 23.90%	16.80%
WACC	14.9% - 21.2%	18.1%

WACC

RENUKA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.63	1.73

Additional risk adjustments	0.0%	0.5%
Cost of equity	20.40%	24.00%

Tax rate	14.20%	24.70%
Debt/Equity ratio	0.84	0.84
Cost of debt	9.70%	23.90%

After-tax WACC	14.9%	21.2%


Selected WACC	18.1%

RENUKA.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 RENUKA.NS:

cost_of_equity (22.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.63) + 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.