SURYALAXMI.NS WACC - Weighted Average Cost of Capital

The WACC of Surya Lakshmi Cotton Mills Ltd (SURYALAXMI.NS) is 10.0%.

The Cost of Equity of Surya Lakshmi Cotton Mills Ltd (SURYALAXMI.NS) is 13.50%.

The Cost of Debt of Surya Lakshmi Cotton Mills Ltd (SURYALAXMI.NS) is 11.65%.

	Range	Selected
Cost of equity	11.50% - 15.50%	13.50%
Tax rate	30.70% - 31.50%	31.10%
Cost of debt	11.20% - 12.10%	11.65%
WACC	9.1% - 11.0%	10.0%

WACC

SURYALAXMI.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.56	0.83

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	15.50%

Tax rate	30.70%	31.50%
Debt/Equity ratio	1.73	1.73
Cost of debt	11.20%	12.10%

After-tax WACC	9.1%	11.0%


Selected WACC	10.0%

SURYALAXMI.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 SURYALAXMI.NS:

cost_of_equity (13.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.56) + 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.