CERA.NS WACC - Weighted Average Cost of Capital

The WACC of Cera Sanitaryware Ltd (CERA.NS) is 12.6%.

The Cost of Equity of Cera Sanitaryware Ltd (CERA.NS) is 12.65%.

The Cost of Debt of Cera Sanitaryware Ltd (CERA.NS) is 6.40%.

	Range	Selected
Cost of equity	10.50% - 14.80%	12.65%
Tax rate	24.20% - 25.00%	24.60%
Cost of debt	5.30% - 7.50%	6.40%
WACC	10.4% - 14.7%	12.6%

WACC

CERA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.44	0.74

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.50%	14.80%

Tax rate	24.20%	25.00%
Debt/Equity ratio	0.01	0.01
Cost of debt	5.30%	7.50%

After-tax WACC	10.4%	14.7%


Selected WACC	12.6%

CERA.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 CERA.NS:

cost_of_equity (12.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.44) + 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.