SUNFLAG.NS WACC - Weighted Average Cost of Capital

The WACC of Sunflag Iron and Steel Co Ltd (SUNFLAG.NS) is 16.4%.

The Cost of Equity of Sunflag Iron and Steel Co Ltd (SUNFLAG.NS) is 17.65%.

The Cost of Debt of Sunflag Iron and Steel Co Ltd (SUNFLAG.NS) is 10.50%.

	Range	Selected
Cost of equity	16.50% - 18.80%	17.65%
Tax rate	19.20% - 22.70%	20.95%
Cost of debt	9.10% - 11.90%	10.50%
WACC	15.3% - 17.6%	16.4%

WACC

SUNFLAG.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.16	1.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.50%	18.80%

Tax rate	19.20%	22.70%
Debt/Equity ratio	0.15	0.15
Cost of debt	9.10%	11.90%

After-tax WACC	15.3%	17.6%


Selected WACC	16.4%

SUNFLAG.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 SUNFLAG.NS:

cost_of_equity (17.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.16) + 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.