STEELCITY.NS WACC - Weighted Average Cost of Capital

The WACC of Steel City Securities Ltd (STEELCITY.NS) is 14.1%.

The Cost of Equity of Steel City Securities Ltd (STEELCITY.NS) is 13.35%.

The Cost of Debt of Steel City Securities Ltd (STEELCITY.NS) is 201.40%.

	Range	Selected
Cost of equity	11.80% - 14.90%	13.35%
Tax rate	26.50% - 27.00%	26.75%
Cost of debt	7.50% - 395.30%	201.40%
WACC	11.8% - 16.4%	14.1%

WACC

STEELCITY.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	0.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.80%	14.90%

Tax rate	26.50%	27.00%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.50%	395.30%

After-tax WACC	11.8%	16.4%


Selected WACC	14.1%

STEELCITY.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 STEELCITY.NS:

cost_of_equity (13.35%) = 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.