SPMLINFRA.NS WACC - Weighted Average Cost of Capital

The WACC of SPML Infra Ltd (SPMLINFRA.NS) is 14.5%.

The Cost of Equity of SPML Infra Ltd (SPMLINFRA.NS) is 18.50%.

The Cost of Debt of SPML Infra Ltd (SPMLINFRA.NS) is 8.05%.

	Range	Selected
Cost of equity	15.10% - 21.90%	18.50%
Tax rate	30.00% - 30.00%	30.00%
Cost of debt	4.00% - 12.10%	8.05%
WACC	11.3% - 17.7%	14.5%

WACC

SPMLINFRA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.99	1.51

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.10%	21.90%

Tax rate	30.00%	30.00%
Debt/Equity ratio	0.45	0.45
Cost of debt	4.00%	12.10%

After-tax WACC	11.3%	17.7%


Selected WACC	14.5%

SPMLINFRA.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 SPMLINFRA.NS:

cost_of_equity (18.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.99) + 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.