SNOWMAN.NS WACC - Weighted Average Cost of Capital

The WACC of Snowman Logistics Ltd (SNOWMAN.NS) is 12.3%.

The Cost of Equity of Snowman Logistics Ltd (SNOWMAN.NS) is 13.40%.

The Cost of Debt of Snowman Logistics Ltd (SNOWMAN.NS) is 12.05%.

	Range	Selected
Cost of equity	10.30% - 16.50%	13.40%
Tax rate	30.00% - 30.00%	30.00%
Cost of debt	8.70% - 15.40%	12.05%
WACC	9.4% - 15.3%	12.3%

WACC

SNOWMAN.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.41	0.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.30%	16.50%

Tax rate	30.00%	30.00%
Debt/Equity ratio	0.28	0.28
Cost of debt	8.70%	15.40%

After-tax WACC	9.4%	15.3%


Selected WACC	12.3%

SNOWMAN.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 SNOWMAN.NS:

cost_of_equity (13.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.41) + 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.