SAREGAMA.NS WACC - Weighted Average Cost of Capital

The WACC of Saregama India Ltd (SAREGAMA.NS) is 12.4%.

The Cost of Equity of Saregama India Ltd (SAREGAMA.NS) is 12.40%.

The Cost of Debt of Saregama India Ltd (SAREGAMA.NS) is 76.75%.

	Range	Selected
Cost of equity	11.20% - 13.60%	12.40%
Tax rate	25.40% - 26.10%	25.75%
Cost of debt	7.50% - 146.00%	76.75%
WACC	11.2% - 13.7%	12.4%

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	0.52	0.62

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.20%	13.60%

Tax rate	25.40%	26.10%
Debt/Equity ratio	0	0
Cost of debt	7.50%	146.00%

After-tax WACC	11.2%	13.7%


Selected WACC	12.4%

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 (12.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.52) + 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.