SMLISUZU.NS
SML Isuzu Ltd
Price:  
2,722.8 
INR
Volume:  
1,106,784
India | Machinery

SMLISUZU.NS WACC - Weighted Average Cost of Capital

The WACC of SML Isuzu Ltd (SMLISUZU.NS) is 16.5%.

The Cost of Equity of SML Isuzu Ltd (SMLISUZU.NS) is 17.7%.
The Cost of Debt of SML Isuzu Ltd (SMLISUZU.NS) is 9.15%.

RangeSelected
Cost of equity16.5% - 18.9%17.7%
Tax rate1.0% - 6.7%3.85%
Cost of debt7.9% - 10.4%9.15%
WACC15.3% - 17.7%16.5%
WACC

SMLISUZU.NS WACC calculation

CategoryLowHigh
Long-term bond rate6.9%7.4%
Equity market risk premium8.3%9.3%
Adjusted beta1.161.19
Additional risk adjustments0.0%0.5%
Cost of equity16.5%18.9%
Tax rate1.0%6.7%
Debt/Equity ratio
0.160.16
Cost of debt7.9%10.4%
After-tax WACC15.3%17.7%
Selected WACC16.5%

SMLISUZU.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 SMLISUZU.NS:

cost_of_equity (17.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.16) + 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.