USHAMART.NS WACC - Weighted Average Cost of Capital

The WACC of Usha Martin Ltd (USHAMART.NS) is 16.3%.

The Cost of Equity of Usha Martin Ltd (USHAMART.NS) is 16.80%.

The Cost of Debt of Usha Martin Ltd (USHAMART.NS) is 6.95%.

	Range	Selected
Cost of equity	15.40% - 18.20%	16.80%
Tax rate	21.80% - 23.50%	22.65%
Cost of debt	6.40% - 7.50%	6.95%
WACC	15.0% - 17.7%	16.3%

WACC

USHAMART.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.02	1.11

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.40%	18.20%

Tax rate	21.80%	23.50%
Debt/Equity ratio	0.04	0.04
Cost of debt	6.40%	7.50%

After-tax WACC	15.0%	17.7%


Selected WACC	16.3%

USHAMART.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 USHAMART.NS:

cost_of_equity (16.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.02) + 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.