SUTLEJTEX.NS WACC - Weighted Average Cost of Capital

The WACC of Sutlej Textiles and Industries Ltd (SUTLEJTEX.NS) is 11.9%.

The Cost of Equity of Sutlej Textiles and Industries Ltd (SUTLEJTEX.NS) is 21.80%.

The Cost of Debt of Sutlej Textiles and Industries Ltd (SUTLEJTEX.NS) is 6.75%.

	Range	Selected
Cost of equity	18.90% - 24.70%	21.80%
Tax rate	37.20% - 39.70%	38.45%
Cost of debt	6.50% - 7.00%	6.75%
WACC	10.6% - 13.2%	11.9%

WACC

SUTLEJTEX.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.44	1.81

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.90%	24.70%

Tax rate	37.20%	39.70%
Debt/Equity ratio	1.28	1.28
Cost of debt	6.50%	7.00%

After-tax WACC	10.6%	13.2%


Selected WACC	11.9%

SUTLEJTEX.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 SUTLEJTEX.NS:

cost_of_equity (21.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.44) + 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.