SALSTEEL.NS WACC - Weighted Average Cost of Capital

The WACC of S A L Steel Ltd (SALSTEEL.NS) is 14.2%.

The Cost of Equity of S A L Steel Ltd (SALSTEEL.NS) is 17.30%.

The Cost of Debt of S A L Steel Ltd (SALSTEEL.NS) is 15.70%.

	Range	Selected
Cost of equity	14.50% - 20.10%	17.30%
Tax rate	18.90% - 27.70%	23.30%
Cost of debt	7.50% - 23.90%	15.70%
WACC	9.9% - 18.5%	14.2%

WACC

SALSTEEL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.92	1.31

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.50%	20.10%

Tax rate	18.90%	27.70%
Debt/Equity ratio	1.21	1.21
Cost of debt	7.50%	23.90%

After-tax WACC	9.9%	18.5%


Selected WACC	14.2%

SALSTEEL.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 SALSTEEL.NS:

cost_of_equity (17.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.92) + 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.