SAKSOFT.NS WACC - Weighted Average Cost of Capital

The WACC of Saksoft Ltd (SAKSOFT.NS) is 16.0%.

The Cost of Equity of Saksoft Ltd (SAKSOFT.NS) is 16.25%.

The Cost of Debt of Saksoft Ltd (SAKSOFT.NS) is 9.20%.

	Range	Selected
Cost of equity	13.30% - 19.20%	16.25%
Tax rate	22.20% - 22.70%	22.45%
Cost of debt	7.50% - 10.90%	9.20%
WACC	13.0% - 18.9%	16.0%

WACC

SAKSOFT.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.77	1.22

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.30%	19.20%

Tax rate	22.20%	22.70%
Debt/Equity ratio	0.03	0.03
Cost of debt	7.50%	10.90%

After-tax WACC	13.0%	18.9%


Selected WACC	16.0%

SAKSOFT.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 SAKSOFT.NS:

cost_of_equity (16.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.77) + 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.