SAGCEM.NS WACC - Weighted Average Cost of Capital

The WACC of Sagar Cements Ltd (SAGCEM.NS) is 12.7%.

The Cost of Equity of Sagar Cements Ltd (SAGCEM.NS) is 15.75%.

The Cost of Debt of Sagar Cements Ltd (SAGCEM.NS) is 9.25%.

	Range	Selected
Cost of equity	14.00% - 17.50%	15.75%
Tax rate	29.60% - 35.50%	32.55%
Cost of debt	7.00% - 11.50%	9.25%
WACC	11.1% - 14.3%	12.7%

WACC

SAGCEM.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.86	1.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.00%	17.50%

Tax rate	29.60%	35.50%
Debt/Equity ratio	0.46	0.46
Cost of debt	7.00%	11.50%

After-tax WACC	11.1%	14.3%


Selected WACC	12.7%

SAGCEM.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 SAGCEM.NS:

cost_of_equity (15.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.86) + 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.