STARPAPER.NS WACC - Weighted Average Cost of Capital

The WACC of Star Paper Mills Ltd (STARPAPER.NS) is 14.6%.

The Cost of Equity of Star Paper Mills Ltd (STARPAPER.NS) is 13.70%.

The Cost of Debt of Star Paper Mills Ltd (STARPAPER.NS) is 80.85%.

	Range	Selected
Cost of equity	12.10% - 15.30%	13.70%
Tax rate	21.10% - 21.90%	21.50%
Cost of debt	7.50% - 154.20%	80.85%
WACC	12.0% - 17.1%	14.6%

WACC

STARPAPER.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.63	0.8

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.10%	15.30%

Tax rate	21.10%	21.90%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.50%	154.20%

After-tax WACC	12.0%	17.1%


Selected WACC	14.6%

STARPAPER.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 STARPAPER.NS:

cost_of_equity (13.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.63) + 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.