SJVN.NS WACC - Weighted Average Cost of Capital

The WACC of SJVN Ltd (SJVN.NS) is 13.6%.

The Cost of Equity of SJVN Ltd (SJVN.NS) is 16.35%.

The Cost of Debt of SJVN Ltd (SJVN.NS) is 11.35%.

	Range	Selected
Cost of equity	12.60% - 20.10%	16.35%
Tax rate	21.80% - 22.90%	22.35%
Cost of debt	7.30% - 15.40%	11.35%
WACC	10.2% - 17.1%	13.6%

WACC

SJVN.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.69	1.31

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.60%	20.10%

Tax rate	21.80%	22.90%
Debt/Equity ratio	0.55	0.55
Cost of debt	7.30%	15.40%

After-tax WACC	10.2%	17.1%


Selected WACC	13.6%

SJVN.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 SJVN.NS:

cost_of_equity (16.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.69) + 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.