SALZERELEC.NS WACC - Weighted Average Cost of Capital

The WACC of Salzer Electronics Ltd (SALZERELEC.NS) is 14.3%.

The Cost of Equity of Salzer Electronics Ltd (SALZERELEC.NS) is 15.70%.

The Cost of Debt of Salzer Electronics Ltd (SALZERELEC.NS) is 8.05%.

	Range	Selected
Cost of equity	14.50% - 16.90%	15.70%
Tax rate	24.80% - 26.20%	25.50%
Cost of debt	5.60% - 10.50%	8.05%
WACC	13.0% - 15.6%	14.3%

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	0.91	0.97

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.50%	16.90%

Tax rate	24.80%	26.20%
Debt/Equity ratio	0.16	0.16
Cost of debt	5.60%	10.50%

After-tax WACC	13.0%	15.6%


Selected WACC	14.3%

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 (15.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.91) + 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.