SHANKARA.NS
Shankara Building Products Ltd
Price:  
1,023.60 
INR
Volume:  
79,908.00
India | Specialty Retail
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SHANKARA.NS WACC - Weighted Average Cost of Capital

The WACC of Shankara Building Products Ltd (SHANKARA.NS) is 14.1%.

The Cost of Equity of Shankara Building Products Ltd (SHANKARA.NS) is 14.05%.
The Cost of Debt of Shankara Building Products Ltd (SHANKARA.NS) is 21.10%.

Range Selected
Cost of equity 12.70% - 15.40% 14.05%
Tax rate 25.20% - 25.30% 25.25%
Cost of debt 10.00% - 32.20% 21.10%
WACC 12.5% - 15.7% 14.1%
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 0.71 0.81
Additional risk adjustments 0.0% 0.5%
Cost of equity 12.70% 15.40%
Tax rate 25.20% 25.30%
Debt/Equity ratio 0.04 0.04
Cost of debt 10.00% 32.20%
After-tax WACC 12.5% 15.7%
Selected WACC 14.1%

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 (14.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.71) + 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.