SOMICONVEY.NS WACC - Weighted Average Cost of Capital

The WACC of Somi Conveyor Beltings Ltd (SOMICONVEY.NS) is 13.0%.

The Cost of Equity of Somi Conveyor Beltings Ltd (SOMICONVEY.NS) is 14.25%.

The Cost of Debt of Somi Conveyor Beltings Ltd (SOMICONVEY.NS) is 7.90%.

	Range	Selected
Cost of equity	12.20% - 16.30%	14.25%
Tax rate	25.30% - 26.50%	25.90%
Cost of debt	7.90% - 7.90%	7.90%
WACC	11.3% - 14.7%	13.0%

WACC

SOMICONVEY.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.65	0.9

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.20%	16.30%

Tax rate	25.30%	26.50%
Debt/Equity ratio	0.18	0.18
Cost of debt	7.90%	7.90%

After-tax WACC	11.3%	14.7%


Selected WACC	13.0%

SOMICONVEY.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 SOMICONVEY.NS:

cost_of_equity (14.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.65) + 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.