SURYALAXMI.NS WACC - Weighted Average Cost of Capital

The WACC of Surya Lakshmi Cotton Mills Ltd (SURYALAXMI.NS) is 12.2%.

The Cost of Equity of Surya Lakshmi Cotton Mills Ltd (SURYALAXMI.NS) is 16.10%.

The Cost of Debt of Surya Lakshmi Cotton Mills Ltd (SURYALAXMI.NS) is 15.10%.

	Range	Selected
Cost of equity	14.10% - 18.10%	16.10%
Tax rate	31.70% - 32.90%	32.30%
Cost of debt	11.60% - 18.60%	15.10%
WACC	10.0% - 14.4%	12.2%

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	0.88	1.1

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.10%	18.10%

Tax rate	31.70%	32.90%
Debt/Equity ratio	1.94	1.94
Cost of debt	11.60%	18.60%

After-tax WACC	10.0%	14.4%


Selected WACC	12.2%

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 (16.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.88) + 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.