SHREECEM.NS
Shree Cement Ltd
Price:  
31,100 
INR
Volume:  
24,794
India | Construction Materials

SHREECEM.NS WACC - Weighted Average Cost of Capital

The WACC of Shree Cement Ltd (SHREECEM.NS) is 14.7%.

The Cost of Equity of Shree Cement Ltd (SHREECEM.NS) is 14.8%.
The Cost of Debt of Shree Cement Ltd (SHREECEM.NS) is 8.3%.

RangeSelected
Cost of equity13.3% - 16.3%14.8%
Tax rate17.5% - 19.1%18.3%
Cost of debt7.8% - 8.8%8.3%
WACC13.2% - 16.1%14.7%
WACC

SHREECEM.NS WACC calculation

CategoryLowHigh
Long-term bond rate6.9%7.4%
Equity market risk premium8.3%9.3%
Adjusted beta0.780.9
Additional risk adjustments0.0%0.5%
Cost of equity13.3%16.3%
Tax rate17.5%19.1%
Debt/Equity ratio
0.010.01
Cost of debt7.8%8.8%
After-tax WACC13.2%16.1%
Selected WACC14.7%

SHREECEM.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 SHREECEM.NS:

cost_of_equity (14.80%) = 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.