SHARDAMOTR.NS WACC - Weighted Average Cost of Capital

The WACC of Sharda Motor Industries Ltd (SHARDAMOTR.NS) is 16.7%.

The Cost of Equity of Sharda Motor Industries Ltd (SHARDAMOTR.NS) is 16.75%.

The Cost of Debt of Sharda Motor Industries Ltd (SHARDAMOTR.NS) is 11.20%.

	Range	Selected
Cost of equity	15.40% - 18.10%	16.75%
Tax rate	25.20% - 25.30%	25.25%
Cost of debt	7.50% - 14.90%	11.20%
WACC	15.3% - 18.0%	16.7%

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	1.02	1.1

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.40%	18.10%

Tax rate	25.20%	25.30%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.50%	14.90%

After-tax WACC	15.3%	18.0%


Selected WACC	16.7%

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 (16.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.02) + 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.