SAREGAMA.NS WACC - Weighted Average Cost of Capital

The WACC of Saregama India Ltd (SAREGAMA.NS) is 11.9%.

The Cost of Equity of Saregama India Ltd (SAREGAMA.NS) is 11.55%.

The Cost of Debt of Saregama India Ltd (SAREGAMA.NS) is 80.95%.

	Range	Selected
Cost of equity	10.50% - 12.60%	11.55%
Tax rate	25.80% - 26.40%	26.10%
Cost of debt	7.50% - 154.40%	80.95%
WACC	10.5% - 13.3%	11.9%

WACC

SAREGAMA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.44	0.51

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.50%	12.60%

Tax rate	25.80%	26.40%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.50%	154.40%

After-tax WACC	10.5%	13.3%


Selected WACC	11.9%

SAREGAMA.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 SAREGAMA.NS:

cost_of_equity (11.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.44) + 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.