RSWM.NS WACC - Weighted Average Cost of Capital

The WACC of RSWM Ltd (RSWM.NS) is 12.0%.

The Cost of Equity of RSWM Ltd (RSWM.NS) is 22.05%.

The Cost of Debt of RSWM Ltd (RSWM.NS) is 11.40%.

	Range	Selected
Cost of equity	18.30% - 25.80%	22.05%
Tax rate	22.90% - 27.90%	25.40%
Cost of debt	7.40% - 15.40%	11.40%
WACC	9.0% - 14.9%	12.0%

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	1.37	1.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.30%	25.80%

Tax rate	22.90%	27.90%
Debt/Equity ratio	2.82	2.82
Cost of debt	7.40%	15.40%

After-tax WACC	9.0%	14.9%


Selected WACC	12.0%

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 (22.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.37) + 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.