SUPREMEENG.NS WACC - Weighted Average Cost of Capital

The WACC of Supreme Engineering Ltd (SUPREMEENG.NS) is 7.5%.

The Cost of Equity of Supreme Engineering Ltd (SUPREMEENG.NS) is 13.10%.

The Cost of Debt of Supreme Engineering Ltd (SUPREMEENG.NS) is 5.75%.

	Range	Selected
Cost of equity	10.00% - 16.20%	13.10%
Tax rate	12.60% - 20.30%	16.45%
Cost of debt	4.50% - 7.00%	5.75%
WACC	5.9% - 9.1%	7.5%

WACC

SUPREMEENG.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.38	0.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.00%	16.20%

Tax rate	12.60%	20.30%
Debt/Equity ratio	2.01	2.01
Cost of debt	4.50%	7.00%

After-tax WACC	5.9%	9.1%


Selected WACC	7.5%

SUPREMEENG.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 SUPREMEENG.NS:

cost_of_equity (13.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.38) + 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.