SUNDARMFIN.NS WACC - Weighted Average Cost of Capital

The WACC of Sundaram Finance Ltd (SUNDARMFIN.NS) is 13.3%.

The Cost of Equity of Sundaram Finance Ltd (SUNDARMFIN.NS) is 14.55%.

The Cost of Debt of Sundaram Finance Ltd (SUNDARMFIN.NS) is 15.65%.

	Range	Selected
Cost of equity	12.50% - 16.60%	14.55%
Tax rate	24.70% - 24.90%	24.80%
Cost of debt	7.40% - 23.90%	15.65%
WACC	9.4% - 17.2%	13.3%

WACC

SUNDARMFIN.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.67	0.94

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.50%	16.60%

Tax rate	24.70%	24.90%
Debt/Equity ratio	0.81	0.81
Cost of debt	7.40%	23.90%

After-tax WACC	9.4%	17.2%


Selected WACC	13.3%

SUNDARMFIN.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 SUNDARMFIN.NS:

cost_of_equity (14.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.67) + 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.