SUNDARAM.NS WACC - Weighted Average Cost of Capital

The WACC of Sundaram Multi Pap Ltd (SUNDARAM.NS) is 14.0%.

The Cost of Equity of Sundaram Multi Pap Ltd (SUNDARAM.NS) is 12.30%.

The Cost of Debt of Sundaram Multi Pap Ltd (SUNDARAM.NS) is 19.80%.

	Range	Selected
Cost of equity	11.00% - 13.60%	12.30%
Tax rate	0.80% - 1.70%	1.25%
Cost of debt	12.70% - 26.90%	19.80%
WACC	11.3% - 16.6%	14.0%

WACC

SUNDARAM.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.49	0.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.00%	13.60%

Tax rate	0.80%	1.70%
Debt/Equity ratio	0.3	0.3
Cost of debt	12.70%	26.90%

After-tax WACC	11.3%	16.6%


Selected WACC	14.0%

SUNDARAM.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 SUNDARAM.NS:

cost_of_equity (12.30%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.49) + 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.