STARPAPER.NS WACC - Weighted Average Cost of Capital

The WACC of Star Paper Mills Ltd (STARPAPER.NS) is 13.8%.

The Cost of Equity of Star Paper Mills Ltd (STARPAPER.NS) is 13.00%.

The Cost of Debt of Star Paper Mills Ltd (STARPAPER.NS) is 74.05%.

	Range	Selected
Cost of equity	11.80% - 14.20%	13.00%
Tax rate	21.10% - 22.40%	21.75%
Cost of debt	7.50% - 140.60%	74.05%
WACC	11.7% - 15.9%	13.8%

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	0.6	0.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.80%	14.20%

Tax rate	21.10%	22.40%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.50%	140.60%

After-tax WACC	11.7%	15.9%


Selected WACC	13.8%

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 (13.00%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.6) + 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.