SPIC.NS WACC - Weighted Average Cost of Capital

The WACC of Southern Petrochemical Industries Corporation Ltd (SPIC.NS) is 13.9%.

The Cost of Equity of Southern Petrochemical Industries Corporation Ltd (SPIC.NS) is 16.20%.

The Cost of Debt of Southern Petrochemical Industries Corporation Ltd (SPIC.NS) is 7.10%.

	Range	Selected
Cost of equity	13.50% - 18.90%	16.20%
Tax rate	5.10% - 6.10%	5.60%
Cost of debt	7.00% - 7.20%	7.10%
WACC	11.8% - 16.0%	13.9%

WACC

SPIC.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	1.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.50%	18.90%

Tax rate	5.10%	6.10%
Debt/Equity ratio	0.31	0.31
Cost of debt	7.00%	7.20%

After-tax WACC	11.8%	16.0%


Selected WACC	13.9%

SPIC.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 SPIC.NS:

cost_of_equity (16.20%) = 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.