SETUINFRA.NS WACC - Weighted Average Cost of Capital

The WACC of Setubandhan Infrastructure Ltd (SETUINFRA.NS) is 11.6%.

The Cost of Equity of Setubandhan Infrastructure Ltd (SETUINFRA.NS) is 51.40%.

The Cost of Debt of Setubandhan Infrastructure Ltd (SETUINFRA.NS) is 7.75%.

	Range	Selected
Cost of equity	40.80% - 62.00%	51.40%
Tax rate	5.60% - 38.50%	22.05%
Cost of debt	7.50% - 8.00%	7.75%
WACC	11.2% - 12.0%	11.6%

WACC

SETUINFRA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	4.08	5.82

Additional risk adjustments	0.0%	0.5%
Cost of equity	40.80%	62.00%

Tax rate	5.60%	38.50%
Debt/Equity ratio	7.02	7.02
Cost of debt	7.50%	8.00%

After-tax WACC	11.2%	12.0%


Selected WACC	11.6%

SETUINFRA.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 SETUINFRA.NS:

cost_of_equity (51.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (4.08) + 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.