SHOPERSTOP.NS WACC - Weighted Average Cost of Capital

The WACC of Shoppers Stop Ltd (SHOPERSTOP.NS) is 13.0%.

The Cost of Equity of Shoppers Stop Ltd (SHOPERSTOP.NS) is 15.95%.

The Cost of Debt of Shoppers Stop Ltd (SHOPERSTOP.NS) is 15.10%.

	Range	Selected
Cost of equity	14.20% - 17.70%	15.95%
Tax rate	30.00% - 40.50%	35.25%
Cost of debt	11.60% - 18.60%	15.10%
WACC	11.3% - 14.6%	13.0%

WACC

SHOPERSTOP.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.88	1.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.20%	17.70%

Tax rate	30.00%	40.50%
Debt/Equity ratio	0.89	0.89
Cost of debt	11.60%	18.60%

After-tax WACC	11.3%	14.6%


Selected WACC	13.0%

SHOPERSTOP.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 SHOPERSTOP.NS:

cost_of_equity (15.95%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.88) + 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.