SHILPAMED.NS WACC - Weighted Average Cost of Capital

The WACC of Shilpa Medicare Ltd (SHILPAMED.NS) is 15.5%.

The Cost of Equity of Shilpa Medicare Ltd (SHILPAMED.NS) is 16.40%.

The Cost of Debt of Shilpa Medicare Ltd (SHILPAMED.NS) is 9.05%.

	Range	Selected
Cost of equity	14.90% - 17.90%	16.40%
Tax rate	22.70% - 31.30%	27.00%
Cost of debt	7.60% - 10.50%	9.05%
WACC	14.1% - 16.8%	15.5%

WACC

SHILPAMED.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.97	1.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.90%	17.90%

Tax rate	22.70%	31.30%
Debt/Equity ratio	0.1	0.1
Cost of debt	7.60%	10.50%

After-tax WACC	14.1%	16.8%


Selected WACC	15.5%

SHILPAMED.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 SHILPAMED.NS:

cost_of_equity (16.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.97) + 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.