SELAN.NS
Selan Exploration Technology Ltd
Price:  
500.20 
INR
Volume:  
79,582.00
India | Oil, Gas & Consumable Fuels
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SELAN.NS WACC - Weighted Average Cost of Capital

The WACC of Selan Exploration Technology Ltd (SELAN.NS) is 12.7%.

The Cost of Equity of Selan Exploration Technology Ltd (SELAN.NS) is 12.75%.
The Cost of Debt of Selan Exploration Technology Ltd (SELAN.NS) is 5.75%.

Range Selected
Cost of equity 10.60% - 14.90% 12.75%
Tax rate 27.00% - 29.80% 28.40%
Cost of debt 4.00% - 7.50% 5.75%
WACC 10.5% - 14.9% 12.7%
WACC

SELAN.NS WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.45 0.76
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.60% 14.90%
Tax rate 27.00% 29.80%
Debt/Equity ratio 0 0
Cost of debt 4.00% 7.50%
After-tax WACC 10.5% 14.9%
Selected WACC 12.7%

SELAN.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 SELAN.NS:

cost_of_equity (12.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.45) + 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.