RSWM.NS WACC - Weighted Average Cost of Capital

The WACC of RSWM Ltd (RSWM.NS) is 12.4%.

The Cost of Equity of RSWM Ltd (RSWM.NS) is 21.80%.

The Cost of Debt of RSWM Ltd (RSWM.NS) is 9.75%.

	Range	Selected
Cost of equity	20.10% - 23.50%	21.80%
Tax rate	18.80% - 21.60%	20.20%
Cost of debt	7.40% - 12.10%	9.75%
WACC	10.7% - 14.1%	12.4%

WACC

RSWM.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.59	1.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	20.10%	23.50%

Tax rate	18.80%	21.60%
Debt/Equity ratio	2.02	2.02
Cost of debt	7.40%	12.10%

After-tax WACC	10.7%	14.1%


Selected WACC	12.4%

RSWM.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 RSWM.NS:

cost_of_equity (21.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.59) + 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.