SUNFLAG.NS WACC - Weighted Average Cost of Capital

The WACC of Sunflag Iron and Steel Co Ltd (SUNFLAG.NS) is 15.8%.

The Cost of Equity of Sunflag Iron and Steel Co Ltd (SUNFLAG.NS) is 17.00%.

The Cost of Debt of Sunflag Iron and Steel Co Ltd (SUNFLAG.NS) is 10.70%.

	Range	Selected
Cost of equity	15.70% - 18.30%	17.00%
Tax rate	22.90% - 23.60%	23.25%
Cost of debt	8.10% - 13.30%	10.70%
WACC	14.4% - 17.1%	15.8%

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	1.06	1.12

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.70%	18.30%

Tax rate	22.90%	23.60%
Debt/Equity ratio	0.16	0.16
Cost of debt	8.10%	13.30%

After-tax WACC	14.4%	17.1%


Selected WACC	15.8%

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 (17.00%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.06) + 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.