SALONA.NS WACC - Weighted Average Cost of Capital

The WACC of Salona Cotspin Ltd (SALONA.NS) is 10.5%.

The Cost of Equity of Salona Cotspin Ltd (SALONA.NS) is 15.30%.

The Cost of Debt of Salona Cotspin Ltd (SALONA.NS) is 10.85%.

	Range	Selected
Cost of equity	12.70% - 17.90%	15.30%
Tax rate	23.70% - 26.40%	25.05%
Cost of debt	9.60% - 12.10%	10.85%
WACC	9.2% - 11.9%	10.5%

WACC

SALONA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.7	1.08

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.70%	17.90%

Tax rate	23.70%	26.40%
Debt/Equity ratio	1.98	1.98
Cost of debt	9.60%	12.10%

After-tax WACC	9.2%	11.9%


Selected WACC	10.5%

SALONA.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 SALONA.NS:

cost_of_equity (15.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.7) + 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.