SPENCERS.NS WACC - Weighted Average Cost of Capital

The WACC of Spencer's Retail Ltd (SPENCERS.NS) is 11.4%.

The Cost of Equity of Spencer's Retail Ltd (SPENCERS.NS) is 19.25%.

The Cost of Debt of Spencer's Retail Ltd (SPENCERS.NS) is 8.80%.

	Range	Selected
Cost of equity	17.20% - 21.30%	19.25%
Tax rate	0.20% - 0.20%	0.20%
Cost of debt	7.00% - 10.60%	8.80%
WACC	9.5% - 13.3%	11.4%

WACC

SPENCERS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.25	1.45

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.20%	21.30%

Tax rate	0.20%	0.20%
Debt/Equity ratio	3.04	3.04
Cost of debt	7.00%	10.60%

After-tax WACC	9.5%	13.3%


Selected WACC	11.4%

SPENCERS.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 SPENCERS.NS:

cost_of_equity (19.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.25) + 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.