SHANKARA.NS WACC - Weighted Average Cost of Capital

The WACC of Shankara Building Products Ltd (SHANKARA.NS) is 14.4%.

The Cost of Equity of Shankara Building Products Ltd (SHANKARA.NS) is 14.30%.

The Cost of Debt of Shankara Building Products Ltd (SHANKARA.NS) is 21.10%.

	Range	Selected
Cost of equity	12.80% - 15.80%	14.30%
Tax rate	25.20% - 25.30%	25.25%
Cost of debt	10.00% - 32.20%	21.10%
WACC	12.6% - 16.1%	14.4%

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	0.72	0.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.80%	15.80%

Tax rate	25.20%	25.30%
Debt/Equity ratio	0.04	0.04
Cost of debt	10.00%	32.20%

After-tax WACC	12.6%	16.1%


Selected WACC	14.4%

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 (14.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.72) + 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.