The WACC of Sintex Plastics Technology Ltd (SPTL.NS) is 7.2%.
| Range | Selected | |
| Cost of equity | 132.80% - 157.30% | 145.05% |
| Tax rate | 10.80% - 26.60% | 18.70% |
| Cost of debt | 4.00% - 4.50% | 4.25% |
| WACC | 7.0% - 7.4% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 15.16 | 16.05 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 132.80% | 157.30% |
| Tax rate | 10.80% | 26.60% |
| Debt/Equity ratio | 37.04 | 37.04 |
| Cost of debt | 4.00% | 4.50% |
| After-tax WACC | 7.0% | 7.4% |
| Selected WACC | 7.2% | |
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 SPTL.NS:
cost_of_equity (145.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (15.16) + 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.