SHANTI.NS WACC - Weighted Average Cost of Capital

The WACC of Shanti Overseas India Ltd (SHANTI.NS) is 11.3%.

The Cost of Equity of Shanti Overseas India Ltd (SHANTI.NS) is 11.65%.

The Cost of Debt of Shanti Overseas India Ltd (SHANTI.NS) is 8.65%.

	Range	Selected
Cost of equity	10.10% - 13.20%	11.65%
Tax rate	23.90% - 26.00%	24.95%
Cost of debt	7.00% - 10.30%	8.65%
WACC	9.7% - 12.8%	11.3%

WACC

SHANTI.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.39	0.58

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.10%	13.20%

Tax rate	23.90%	26.00%
Debt/Equity ratio	0.09	0.09
Cost of debt	7.00%	10.30%

After-tax WACC	9.7%	12.8%


Selected WACC	11.3%

SHANTI.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 SHANTI.NS:

cost_of_equity (11.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.39) + 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.