SHIVATEX.NS WACC - Weighted Average Cost of Capital

The WACC of Shiva Texyarn Ltd (SHIVATEX.NS) is 12.0%.

The Cost of Equity of Shiva Texyarn Ltd (SHIVATEX.NS) is 13.65%.

The Cost of Debt of Shiva Texyarn Ltd (SHIVATEX.NS) is 11.25%.

	Range	Selected
Cost of equity	12.40% - 14.90%	13.65%
Tax rate	25.20% - 29.00%	27.10%
Cost of debt	10.40% - 12.10%	11.25%
WACC	11.0% - 13.0%	12.0%

WACC

SHIVATEX.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.66	0.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.40%	14.90%

Tax rate	25.20%	29.00%
Debt/Equity ratio	0.43	0.43
Cost of debt	10.40%	12.10%

After-tax WACC	11.0%	13.0%


Selected WACC	12.0%

SHIVATEX.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 SHIVATEX.NS:

cost_of_equity (13.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.66) + 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.