SUZLON.NS WACC - Weighted Average Cost of Capital

The WACC of Suzlon Energy Ltd (SUZLON.NS) is 16.2%.

The Cost of Equity of Suzlon Energy Ltd (SUZLON.NS) is 16.25%.

The Cost of Debt of Suzlon Energy Ltd (SUZLON.NS) is 6.25%.

	Range	Selected
Cost of equity	11.30% - 21.20%	16.25%
Tax rate	0.20% - 1.90%	1.05%
Cost of debt	5.00% - 7.50%	6.25%
WACC	11.3% - 21.1%	16.2%

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	0.54	1.43

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.30%	21.20%

Tax rate	0.20%	1.90%
Debt/Equity ratio	0	0
Cost of debt	5.00%	7.50%

After-tax WACC	11.3%	21.1%


Selected WACC	16.2%

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 (16.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.54) + 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.