SHAKTIPUMP.NS WACC - Weighted Average Cost of Capital

The WACC of Shakti Pumps India Ltd (SHAKTIPUMP.NS) is 14.9%.

The Cost of Equity of Shakti Pumps India Ltd (SHAKTIPUMP.NS) is 15.05%.

The Cost of Debt of Shakti Pumps India Ltd (SHAKTIPUMP.NS) is 9.60%.

	Range	Selected
Cost of equity	13.60% - 16.50%	15.05%
Tax rate	25.30% - 28.10%	26.70%
Cost of debt	7.50% - 11.70%	9.60%
WACC	13.5% - 16.4%	14.9%

WACC

SHAKTIPUMP.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.81	0.92

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.60%	16.50%

Tax rate	25.30%	28.10%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.50%	11.70%

After-tax WACC	13.5%	16.4%


Selected WACC	14.9%

SHAKTIPUMP.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 SHAKTIPUMP.NS:

cost_of_equity (15.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.81) + 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.