SREEL.NS WACC - Weighted Average Cost of Capital

The WACC of Sreeleathers Ltd (SREEL.NS) is 11.6%.

The Cost of Equity of Sreeleathers Ltd (SREEL.NS) is 11.65%.

The Cost of Debt of Sreeleathers Ltd (SREEL.NS) is 7.30%.

	Range	Selected
Cost of equity	10.50% - 12.80%	11.65%
Tax rate	26.30% - 26.40%	26.35%
Cost of debt	7.10% - 7.50%	7.30%
WACC	10.5% - 12.7%	11.6%

WACC

SREEL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.44	0.53

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.50%	12.80%

Tax rate	26.30%	26.40%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.10%	7.50%

After-tax WACC	10.5%	12.7%


Selected WACC	11.6%

SREEL.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 SREEL.NS:

cost_of_equity (11.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.44) + 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.