SIEMENS.NS WACC - Weighted Average Cost of Capital
The WACC of Siemens Ltd (SIEMENS.NS) is 13.4%.
| Range | Selected | |
| Cost of equity | 11.6% - 15.1% | 13.35% |
| Tax rate | 25.7% - 25.9% | 25.8% |
| Cost of debt | 7.5% - 14.4% | 10.95% |
| WACC | 11.6% - 15.1% | 13.4% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.57 | 0.78 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.6% | 15.1% |
| Tax rate | 25.7% | 25.9% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 7.5% | 14.4% |
| After-tax WACC | 11.6% | 15.1% |
| Selected WACC | 13.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SIEMENS.NS | Siemens Ltd | 0 | 1.65 | 1.65 |
| 006840.KS | AK Holdings Inc | 15.02 | 0.35 | 0.03 |
| 3MINDIA.NS | 3M India Ltd | 0 | 0.63 | 0.63 |
| 532485.BO | Balmer Lawrie Investments Ltd | 0.06 | 0.77 | 0.74 |
| APARINDS.NS | Apar Industries Ltd | 0.01 | 1.61 | 1.59 |
| BALMLAWRIE.NS | Balmer Lawrie and Company Ltd | 0.03 | 1.81 | 1.77 |
| GILLANDERS.NS | Gillanders Arbuthnot & Co Ltd | 0.5 | 0.01 | 0.01 |
| GODREJIND.NS | Godrej Industries Ltd | 0.75 | 0.9 | 0.58 |
| JPASSOCIAT.NS | Jaiprakash Associates Ltd | 19.14 | -0.18 | -0.01 |
| OMZZP.ME | OMZ PAO | 0.3 | 0.02 | 0.02 |
| Low | High | |
| Unlevered beta | 0.36 | 0.67 |
| Relevered beta | 0.36 | 0.67 |
| Adjusted relevered beta | 0.57 | 0.78 |
SIEMENS.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 SIEMENS.NS:
cost_of_equity (13.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.57) + 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.