SALZERELEC.NS WACC - Weighted Average Cost of Capital

The WACC of Salzer Electronics Ltd (SALZERELEC.NS) is 15.9%.

The Cost of Equity of Salzer Electronics Ltd (SALZERELEC.NS) is 18.75%.

The Cost of Debt of Salzer Electronics Ltd (SALZERELEC.NS) is 9.70%.

	Range	Selected
Cost of equity	16.70% - 20.80%	18.75%
Tax rate	26.60% - 27.50%	27.05%
Cost of debt	8.90% - 10.50%	9.70%
WACC	14.2% - 17.5%	15.9%

WACC

SALZERELEC.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.19	1.39

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.70%	20.80%

Tax rate	26.60%	27.50%
Debt/Equity ratio	0.32	0.32
Cost of debt	8.90%	10.50%

After-tax WACC	14.2%	17.5%


Selected WACC	15.9%

SALZERELEC.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 SALZERELEC.NS:

cost_of_equity (18.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.19) + 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.