SAIL.NS WACC - Weighted Average Cost of Capital

The WACC of Steel Authority of India Ltd (SAIL.NS) is 13.9%.

The Cost of Equity of Steel Authority of India Ltd (SAIL.NS) is 17.85%.

The Cost of Debt of Steel Authority of India Ltd (SAIL.NS) is 7.75%.

	Range	Selected
Cost of equity	16.30% - 19.40%	17.85%
Tax rate	24.80% - 25.00%	24.90%
Cost of debt	7.40% - 8.10%	7.75%
WACC	12.8% - 15.1%	13.9%

WACC

SAIL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.13	1.24

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.30%	19.40%

Tax rate	24.80%	25.00%
Debt/Equity ratio	0.49	0.49
Cost of debt	7.40%	8.10%

After-tax WACC	12.8%	15.1%


Selected WACC	13.9%

SAIL.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 SAIL.NS:

cost_of_equity (17.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.13) + 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.