SUNDRMBRAK.NS WACC - Weighted Average Cost of Capital

The WACC of Sundaram Brake Linings Ltd (SUNDRMBRAK.NS) is 15.3%.

The Cost of Equity of Sundaram Brake Linings Ltd (SUNDRMBRAK.NS) is 16.70%.

The Cost of Debt of Sundaram Brake Linings Ltd (SUNDRMBRAK.NS) is 7.60%.

	Range	Selected
Cost of equity	15.50% - 17.90%	16.70%
Tax rate	14.60% - 28.10%	21.35%
Cost of debt	6.60% - 8.60%	7.60%
WACC	14.2% - 16.4%	15.3%

WACC

SUNDRMBRAK.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.04	1.08

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.50%	17.90%

Tax rate	14.60%	28.10%
Debt/Equity ratio	0.16	0.16
Cost of debt	6.60%	8.60%

After-tax WACC	14.2%	16.4%


Selected WACC	15.3%

SUNDRMBRAK.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 SUNDRMBRAK.NS:

cost_of_equity (16.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.04) + 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.