SWANENERGY.NS WACC - Weighted Average Cost of Capital

The WACC of Swan Energy Ltd (SWANENERGY.NS) is 13.0%.

The Cost of Equity of Swan Energy Ltd (SWANENERGY.NS) is 15.20%.

The Cost of Debt of Swan Energy Ltd (SWANENERGY.NS) is 8.70%.

	Range	Selected
Cost of equity	11.80% - 18.60%	15.20%
Tax rate	8.80% - 12.70%	10.75%
Cost of debt	7.80% - 9.60%	8.70%
WACC	10.4% - 15.6%	13.0%

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	0.59	1.15

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.80%	18.60%

Tax rate	8.80%	12.70%
Debt/Equity ratio	0.41	0.41
Cost of debt	7.80%	9.60%

After-tax WACC	10.4%	15.6%


Selected WACC	13.0%

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 (15.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.59) + 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.