The WACC of Sri Adhikari Brothers Television Network Ltd (SABTN.NS) is 8.6%.
| Range | Selected | |
| Cost of equity | 24.80% - 43.30% | 34.05% |
| Tax rate | 0.10% - 0.10% | 0.10% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 7.5% - 9.8% | 8.6% |
| Category | Low | High |
| Long-term bond rate | 7.1% | 7.6% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 2.13 | 3.79 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 24.80% | 43.30% |
| Tax rate | 0.10% | 0.10% |
| Debt/Equity ratio | 6.99 | 6.99 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 7.5% | 9.8% |
| Selected WACC | 8.6% | |
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 SABTN.NS:
cost_of_equity (34.05%) = risk_free_rate (7.35%) + equity_risk_premium (8.80%) * adjusted_beta (2.13) + 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.