SAKHTISUG.NS WACC - Weighted Average Cost of Capital

The WACC of Sakthi Sugars Ltd (SAKHTISUG.NS) is 18.1%.

The Cost of Equity of Sakthi Sugars Ltd (SAKHTISUG.NS) is 30.10%.

The Cost of Debt of Sakthi Sugars Ltd (SAKHTISUG.NS) is 14.85%.

	Range	Selected
Cost of equity	27.40% - 32.80%	30.10%
Tax rate	0.90% - 5.60%	3.25%
Cost of debt	5.80% - 23.90%	14.85%
WACC	11.1% - 25.1%	18.1%

WACC

SAKHTISUG.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	2.47	2.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	27.40%	32.80%

Tax rate	0.90%	5.60%
Debt/Equity ratio	3	3
Cost of debt	5.80%	23.90%

After-tax WACC	11.1%	25.1%


Selected WACC	18.1%

SAKHTISUG.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 SAKHTISUG.NS:

cost_of_equity (30.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (2.47) + 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.