SARDAEN.NS WACC - Weighted Average Cost of Capital

The WACC of Sarda Energy & Minerals Ltd (SARDAEN.NS) is 14.4%.

The Cost of Equity of Sarda Energy & Minerals Ltd (SARDAEN.NS) is 15.45%.

The Cost of Debt of Sarda Energy & Minerals Ltd (SARDAEN.NS) is 9.25%.

	Range	Selected
Cost of equity	14.20% - 16.70%	15.45%
Tax rate	24.50% - 25.30%	24.90%
Cost of debt	7.90% - 10.60%	9.25%
WACC	13.2% - 15.6%	14.4%

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	0.88	0.94

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.20%	16.70%

Tax rate	24.50%	25.30%
Debt/Equity ratio	0.14	0.14
Cost of debt	7.90%	10.60%

After-tax WACC	13.2%	15.6%


Selected WACC	14.4%

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 (15.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.88) + 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.