SUMIT.NS WACC - Weighted Average Cost of Capital

The WACC of Sumit Woods Ltd (SUMIT.NS) is 10.5%.

The Cost of Equity of Sumit Woods Ltd (SUMIT.NS) is 11.10%.

The Cost of Debt of Sumit Woods Ltd (SUMIT.NS) is 11.30%.

	Range	Selected
Cost of equity	10.00% - 12.20%	11.10%
Tax rate	25.10% - 26.30%	25.70%
Cost of debt	10.00% - 12.60%	11.30%
WACC	9.5% - 11.6%	10.5%

WACC

SUMIT.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.38	0.47

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.00%	12.20%

Tax rate	25.10%	26.30%
Debt/Equity ratio	0.29	0.29
Cost of debt	10.00%	12.60%

After-tax WACC	9.5%	11.6%


Selected WACC	10.5%

SUMIT.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 SUMIT.NS:

cost_of_equity (11.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.38) + 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.