RSWM.NS WACC - Weighted Average Cost of Capital

The WACC of RSWM Ltd (RSWM.NS) is 16.6%.

The Cost of Equity of RSWM Ltd (RSWM.NS) is 27.15%.

The Cost of Debt of RSWM Ltd (RSWM.NS) is 15.65%.

	Range	Selected
Cost of equity	21.50% - 32.80%	27.15%
Tax rate	22.90% - 27.90%	25.40%
Cost of debt	7.40% - 23.90%	15.65%
WACC	10.9% - 22.4%	16.6%

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	1.76	2.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	21.50%	32.80%

Tax rate	22.90%	27.90%
Debt/Equity ratio	2.04	2.04
Cost of debt	7.40%	23.90%

After-tax WACC	10.9%	22.4%


Selected WACC	16.6%

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 (27.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.76) + 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.