SANOFI.NS WACC - Weighted Average Cost of Capital

The WACC of Sanofi India Ltd (SANOFI.NS) is 13.8%.

The Cost of Equity of Sanofi India Ltd (SANOFI.NS) is 13.80%.

The Cost of Debt of Sanofi India Ltd (SANOFI.NS) is 7.50%.

	Range	Selected
Cost of equity	12.60% - 15.00%	13.80%
Tax rate	27.80% - 28.70%	28.25%
Cost of debt	7.50% - 7.50%	7.50%
WACC	12.6% - 15.0%	13.8%

WACC

SANOFI.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.69	0.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.60%	15.00%

Tax rate	27.80%	28.70%
Debt/Equity ratio	0	0
Cost of debt	7.50%	7.50%

After-tax WACC	12.6%	15.0%


Selected WACC	13.8%

SANOFI.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 SANOFI.NS:

cost_of_equity (13.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.69) + 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.