SRHHYPOLTD.NS WACC - Weighted Average Cost of Capital

The WACC of Sree Rayalaseema Hi-Strength Hypo Ltd (SRHHYPOLTD.NS) is 16.4%.

The Cost of Equity of Sree Rayalaseema Hi-Strength Hypo Ltd (SRHHYPOLTD.NS) is 16.50%.

The Cost of Debt of Sree Rayalaseema Hi-Strength Hypo Ltd (SRHHYPOLTD.NS) is 11.50%.

	Range	Selected
Cost of equity	14.90% - 18.10%	16.50%
Tax rate	22.60% - 25.00%	23.80%
Cost of debt	7.50% - 15.50%	11.50%
WACC	14.8% - 18.0%	16.4%

WACC

SRHHYPOLTD.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.97	1.1

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.90%	18.10%

Tax rate	22.60%	25.00%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.50%	15.50%

After-tax WACC	14.8%	18.0%


Selected WACC	16.4%

SRHHYPOLTD.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 SRHHYPOLTD.NS:

cost_of_equity (16.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.97) + 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.