UMANGDAIRY.NS WACC - Weighted Average Cost of Capital

The WACC of Umang Dairies Ltd (UMANGDAIRY.NS) is 12.2%.

The Cost of Equity of Umang Dairies Ltd (UMANGDAIRY.NS) is 13.85%.

The Cost of Debt of Umang Dairies Ltd (UMANGDAIRY.NS) is 8.50%.

	Range	Selected
Cost of equity	12.50% - 15.20%	13.85%
Tax rate	27.40% - 28.70%	28.05%
Cost of debt	7.90% - 9.10%	8.50%
WACC	11.1% - 13.4%	12.2%

WACC

UMANGDAIRY.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.68	0.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.50%	15.20%

Tax rate	27.40%	28.70%
Debt/Equity ratio	0.26	0.26
Cost of debt	7.90%	9.10%

After-tax WACC	11.1%	13.4%


Selected WACC	12.2%

UMANGDAIRY.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 UMANGDAIRY.NS:

cost_of_equity (13.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.68) + 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.