SWANENERGY.NS WACC - Weighted Average Cost of Capital

The WACC of Swan Energy Ltd (SWANENERGY.NS) is 13.4%.

The Cost of Equity of Swan Energy Ltd (SWANENERGY.NS) is 15.05%.

The Cost of Debt of Swan Energy Ltd (SWANENERGY.NS) is 9.90%.

	Range	Selected
Cost of equity	12.10% - 18.00%	15.05%
Tax rate	8.80% - 13.00%	10.90%
Cost of debt	7.80% - 12.00%	9.90%
WACC	10.8% - 16.1%	13.4%

WACC

SWANENERGY.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.62	1.09

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.10%	18.00%

Tax rate	8.80%	13.00%
Debt/Equity ratio	0.34	0.34
Cost of debt	7.80%	12.00%

After-tax WACC	10.8%	16.1%


Selected WACC	13.4%

SWANENERGY.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 SWANENERGY.NS:

cost_of_equity (15.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.62) + 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.