SMARTLINK.NS WACC - Weighted Average Cost of Capital

The WACC of Smartlink Holdings Ltd (SMARTLINK.NS) is 15.4%.

The Cost of Equity of Smartlink Holdings Ltd (SMARTLINK.NS) is 15.60%.

The Cost of Debt of Smartlink Holdings Ltd (SMARTLINK.NS) is 8.05%.

	Range	Selected
Cost of equity	13.50% - 17.70%	15.60%
Tax rate	17.50% - 20.90%	19.20%
Cost of debt	5.60% - 10.50%	8.05%
WACC	13.3% - 17.5%	15.4%

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	0.8	1.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.50%	17.70%

Tax rate	17.50%	20.90%
Debt/Equity ratio	0.03	0.03
Cost of debt	5.60%	10.50%

After-tax WACC	13.3%	17.5%


Selected WACC	15.4%

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 (15.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.8) + 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.