UGARSUGAR.NS WACC - Weighted Average Cost of Capital

The WACC of Ugar Sugar Works Ltd (UGARSUGAR.NS) is 15.8%.

The Cost of Equity of Ugar Sugar Works Ltd (UGARSUGAR.NS) is 16.65%.

The Cost of Debt of Ugar Sugar Works Ltd (UGARSUGAR.NS) is 17.60%.

	Range	Selected
Cost of equity	14.50% - 18.80%	16.65%
Tax rate	7.60% - 16.60%	12.10%
Cost of debt	8.30% - 26.90%	17.60%
WACC	10.7% - 20.8%	15.8%

WACC

UGARSUGAR.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.92	1.17

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.50%	18.80%

Tax rate	7.60%	16.60%
Debt/Equity ratio	1.25	1.25
Cost of debt	8.30%	26.90%

After-tax WACC	10.7%	20.8%


Selected WACC	15.8%

UGARSUGAR.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 UGARSUGAR.NS:

cost_of_equity (16.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.92) + 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.