SHOPERSTOP.NS WACC - Weighted Average Cost of Capital

The WACC of Shoppers Stop Ltd (SHOPERSTOP.NS) is 12.5%.

The Cost of Equity of Shoppers Stop Ltd (SHOPERSTOP.NS) is 14.90%.

The Cost of Debt of Shoppers Stop Ltd (SHOPERSTOP.NS) is 15.25%.

	Range	Selected
Cost of equity	13.30% - 16.50%	14.90%
Tax rate	26.70% - 37.60%	32.15%
Cost of debt	11.90% - 18.60%	15.25%
WACC	11.0% - 14.0%	12.5%

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	0.78	0.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.30%	16.50%

Tax rate	26.70%	37.60%
Debt/Equity ratio	1.02	1.02
Cost of debt	11.90%	18.60%

After-tax WACC	11.0%	14.0%


Selected WACC	12.5%

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 (14.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.78) + 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.