RENUKA.NS WACC - Weighted Average Cost of Capital

The WACC of Shree Renuka Sugars Ltd (RENUKA.NS) is 17.7%.

The Cost of Equity of Shree Renuka Sugars Ltd (RENUKA.NS) is 21.60%.

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

	Range	Selected
Cost of equity	20.10% - 23.10%	21.60%
Tax rate	14.20% - 24.70%	19.45%
Cost of debt	9.70% - 23.90%	16.80%
WACC	14.7% - 20.7%	17.7%

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	1.6	1.63

Additional risk adjustments	0.0%	0.5%
Cost of equity	20.10%	23.10%

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

After-tax WACC	14.7%	20.7%


Selected WACC	17.7%

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 (21.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.6) + 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.