STEELXIND.NS WACC - Weighted Average Cost of Capital

The WACC of Steel Exchange India Ltd (STEELXIND.NS) is 16.9%.

The Cost of Equity of Steel Exchange India Ltd (STEELXIND.NS) is 18.50%.

The Cost of Debt of Steel Exchange India Ltd (STEELXIND.NS) is 16.40%.

	Range	Selected
Cost of equity	16.60% - 20.40%	18.50%
Tax rate	30.00% - 30.00%	30.00%
Cost of debt	12.10% - 20.70%	16.40%
WACC	14.7% - 19.0%	16.9%

WACC

STEELXIND.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.17	1.34

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.60%	20.40%

Tax rate	30.00%	30.00%
Debt/Equity ratio	0.3	0.3
Cost of debt	12.10%	20.70%

After-tax WACC	14.7%	19.0%


Selected WACC	16.9%

STEELXIND.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 STEELXIND.NS:

cost_of_equity (18.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.17) + 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.