SHREECEM.NS WACC - Weighted Average Cost of Capital

The WACC of Shree Cement Ltd (SHREECEM.NS) is 14.8%.

The Cost of Equity of Shree Cement Ltd (SHREECEM.NS) is 14.95%.

The Cost of Debt of Shree Cement Ltd (SHREECEM.NS) is 8.30%.

	Range	Selected
Cost of equity	13.70% - 16.20%	14.95%
Tax rate	17.50% - 19.10%	18.30%
Cost of debt	7.80% - 8.80%	8.30%
WACC	13.6% - 16.0%	14.8%

WACC

SHREECEM.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.82	0.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.70%	16.20%

Tax rate	17.50%	19.10%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.80%	8.80%

After-tax WACC	13.6%	16.0%


Selected WACC	14.8%

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 (14.95%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.82) + 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.