SHANKARA.NS WACC - Weighted Average Cost of Capital

The WACC of Shankara Building Products Ltd (SHANKARA.NS) is 12.8%.

The Cost of Equity of Shankara Building Products Ltd (SHANKARA.NS) is 12.85%.

The Cost of Debt of Shankara Building Products Ltd (SHANKARA.NS) is 14.50%.

	Range	Selected
Cost of equity	9.80% - 15.90%	12.85%
Tax rate	25.10% - 25.30%	25.20%
Cost of debt	9.10% - 19.90%	14.50%
WACC	9.6% - 15.9%	12.8%

WACC

SHANKARA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.36	0.87

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.80%	15.90%

Tax rate	25.10%	25.30%
Debt/Equity ratio	0.06	0.06
Cost of debt	9.10%	19.90%

After-tax WACC	9.6%	15.9%


Selected WACC	12.8%

SHANKARA.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 SHANKARA.NS:

cost_of_equity (12.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.36) + 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.