UMANGDAIRY.NS WACC - Weighted Average Cost of Capital

The WACC of Umang Dairies Ltd (UMANGDAIRY.NS) is 12.9%.

The Cost of Equity of Umang Dairies Ltd (UMANGDAIRY.NS) is 13.95%.

The Cost of Debt of Umang Dairies Ltd (UMANGDAIRY.NS) is 11.80%.

	Range	Selected
Cost of equity	12.50% - 15.40%	13.95%
Tax rate	27.40% - 29.60%	28.50%
Cost of debt	8.20% - 15.40%	11.80%
WACC	11.3% - 14.5%	12.9%

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	0.67	0.81

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.50%	15.40%

Tax rate	27.40%	29.60%
Debt/Equity ratio	0.23	0.23
Cost of debt	8.20%	15.40%

After-tax WACC	11.3%	14.5%


Selected WACC	12.9%

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 (13.95%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.67) + 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.