MAGADSUGAR.NS WACC - Weighted Average Cost of Capital

The WACC of Magadh Sugar & Energy Ltd (MAGADSUGAR.NS) is 10.3%.

The Cost of Equity of Magadh Sugar & Energy Ltd (MAGADSUGAR.NS) is 15.90%.

The Cost of Debt of Magadh Sugar & Energy Ltd (MAGADSUGAR.NS) is 7.25%.

	Range	Selected
Cost of equity	13.70% - 18.10%	15.90%
Tax rate	25.80% - 27.90%	26.85%
Cost of debt	5.40% - 9.10%	7.25%
WACC	8.6% - 12.0%	10.3%

WACC

MAGADSUGAR.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.82	1.1

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.70%	18.10%

Tax rate	25.80%	27.90%
Debt/Equity ratio	1.11	1.11
Cost of debt	5.40%	9.10%

After-tax WACC	8.6%	12.0%


Selected WACC	10.3%

MAGADSUGAR.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 MAGADSUGAR.NS:

cost_of_equity (15.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.82) + 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.