SUZLON.NS WACC - Weighted Average Cost of Capital

The WACC of Suzlon Energy Ltd (SUZLON.NS) is 16.6%.

The Cost of Equity of Suzlon Energy Ltd (SUZLON.NS) is 16.55%.

The Cost of Debt of Suzlon Energy Ltd (SUZLON.NS) is 14.20%.

	Range	Selected
Cost of equity	11.40% - 21.70%	16.55%
Tax rate	2.70% - 19.90%	11.30%
Cost of debt	7.50% - 20.90%	14.20%
WACC	11.4% - 21.7%	16.6%

WACC

SUZLON.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.55	1.49

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.40%	21.70%

Tax rate	2.70%	19.90%
Debt/Equity ratio	0	0
Cost of debt	7.50%	20.90%

After-tax WACC	11.4%	21.7%


Selected WACC	16.6%

SUZLON.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 SUZLON.NS:

cost_of_equity (16.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.55) + 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.