SARDAEN.NS WACC - Weighted Average Cost of Capital

The WACC of Sarda Energy & Minerals Ltd (SARDAEN.NS) is 15.1%.

The Cost of Equity of Sarda Energy & Minerals Ltd (SARDAEN.NS) is 15.90%.

The Cost of Debt of Sarda Energy & Minerals Ltd (SARDAEN.NS) is 7.75%.

	Range	Selected
Cost of equity	14.40% - 17.40%	15.90%
Tax rate	24.10% - 24.60%	24.35%
Cost of debt	7.60% - 7.90%	7.75%
WACC	13.7% - 16.5%	15.1%

WACC

SARDAEN.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	1.02

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.40%	17.40%

Tax rate	24.10%	24.60%
Debt/Equity ratio	0.09	0.09
Cost of debt	7.60%	7.90%

After-tax WACC	13.7%	16.5%


Selected WACC	15.1%

SARDAEN.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 SARDAEN.NS:

cost_of_equity (15.90%) = 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.