UGARSUGAR.NS WACC - Weighted Average Cost of Capital

The WACC of Ugar Sugar Works Ltd (UGARSUGAR.NS) is 14.6%.

The Cost of Equity of Ugar Sugar Works Ltd (UGARSUGAR.NS) is 17.10%.

The Cost of Debt of Ugar Sugar Works Ltd (UGARSUGAR.NS) is 16.30%.

	Range	Selected
Cost of equity	15.50% - 18.70%	17.10%
Tax rate	19.20% - 27.50%	23.35%
Cost of debt	8.70% - 23.90%	16.30%
WACC	11.2% - 18.0%	14.6%

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	1.04	1.17

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.50%	18.70%

Tax rate	19.20%	27.50%
Debt/Equity ratio	1.02	1.02
Cost of debt	8.70%	23.90%

After-tax WACC	11.2%	18.0%


Selected WACC	14.6%

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 (17.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.04) + 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.