SHARDAMOTR.NS WACC - Weighted Average Cost of Capital

The WACC of Sharda Motor Industries Ltd (SHARDAMOTR.NS) is 17.2%.

The Cost of Equity of Sharda Motor Industries Ltd (SHARDAMOTR.NS) is 17.25%.

The Cost of Debt of Sharda Motor Industries Ltd (SHARDAMOTR.NS) is 10.35%.

	Range	Selected
Cost of equity	15.60% - 18.90%	17.25%
Tax rate	25.30% - 25.40%	25.35%
Cost of debt	7.50% - 13.20%	10.35%
WACC	15.5% - 18.8%	17.2%

WACC

SHARDAMOTR.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.05	1.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.60%	18.90%

Tax rate	25.30%	25.40%
Debt/Equity ratio	0	0
Cost of debt	7.50%	13.20%

After-tax WACC	15.5%	18.8%


Selected WACC	17.2%

SHARDAMOTR.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 SHARDAMOTR.NS:

cost_of_equity (17.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.05) + 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.