The WACC of Sicagen India Ltd (SICAGEN.NS) is 11.9%.
| Range | Selected | |
| Cost of equity | 16.80% - 20.40% | 18.60% |
| Tax rate | 30.00% - 30.00% | 30.00% |
| Cost of debt | 7.70% - 11.00% | 9.35% |
| WACC | 10.5% - 13.4% | 11.9% |
| Category | Low | High |
| Long-term bond rate | 7.2% | 7.7% |
| Equity market risk premium | 8.8% | 9.8% |
| Adjusted beta | 1.09 | 1.24 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 16.80% | 20.40% |
| Tax rate | 30.00% | 30.00% |
| Debt/Equity ratio | 1.25 | 1.25 |
| Cost of debt | 7.70% | 11.00% |
| After-tax WACC | 10.5% | 13.4% |
| Selected WACC | 11.9% | |
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 SICAGEN.NS:
cost_of_equity (18.60%) = risk_free_rate (7.45%) + equity_risk_premium (9.30%) * adjusted_beta (1.09) + 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.