SMARTLINK.NS WACC - Weighted Average Cost of Capital

The WACC of Smartlink Holdings Ltd (SMARTLINK.NS) is 13.7%.

The Cost of Equity of Smartlink Holdings Ltd (SMARTLINK.NS) is 15.45%.

The Cost of Debt of Smartlink Holdings Ltd (SMARTLINK.NS) is 6.20%.

	Range	Selected
Cost of equity	13.30% - 17.60%	15.45%
Tax rate	14.30% - 16.80%	15.55%
Cost of debt	4.60% - 7.80%	6.20%
WACC	11.7% - 15.7%	13.7%

WACC

SMARTLINK.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.77	1.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.30%	17.60%

Tax rate	14.30%	16.80%
Debt/Equity ratio	0.21	0.21
Cost of debt	4.60%	7.80%

After-tax WACC	11.7%	15.7%


Selected WACC	13.7%

SMARTLINK.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 SMARTLINK.NS:

cost_of_equity (15.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.77) + 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.