BANSWRAS.NS WACC - Weighted Average Cost of Capital

The WACC of Banswara Syntex Ltd (BANSWRAS.NS) is 12.5%.

The Cost of Equity of Banswara Syntex Ltd (BANSWRAS.NS) is 16.75%.

The Cost of Debt of Banswara Syntex Ltd (BANSWRAS.NS) is 11.35%.

	Range	Selected
Cost of equity	15.10% - 18.40%	16.75%
Tax rate	23.10% - 26.60%	24.85%
Cost of debt	10.60% - 12.10%	11.35%
WACC	11.5% - 13.5%	12.5%

WACC

BANSWRAS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.99	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.10%	18.40%

Tax rate	23.10%	26.60%
Debt/Equity ratio	1.04	1.04
Cost of debt	10.60%	12.10%

After-tax WACC	11.5%	13.5%


Selected WACC	12.5%

BANSWRAS.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 BANSWRAS.NS:

cost_of_equity (16.75%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.99) + 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.