SADBHAV.NS WACC - Weighted Average Cost of Capital

The WACC of Sadbhav Engineering Ltd (SADBHAV.NS) is 12.7%.

The Cost of Equity of Sadbhav Engineering Ltd (SADBHAV.NS) is 46.15%.

The Cost of Debt of Sadbhav Engineering Ltd (SADBHAV.NS) is 11.55%.

	Range	Selected
Cost of equity	21.40% - 70.90%	46.15%
Tax rate	1.50% - 2.00%	1.75%
Cost of debt	11.00% - 12.10%	11.55%
WACC	11.2% - 14.2%	12.7%

WACC

SADBHAV.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.75	6.77

Additional risk adjustments	0.0%	0.5%
Cost of equity	21.40%	70.90%

Tax rate	1.50%	2.00%
Debt/Equity ratio	24.49	24.49
Cost of debt	11.00%	12.10%

After-tax WACC	11.2%	14.2%


Selected WACC	12.7%

SADBHAV.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 SADBHAV.NS:

cost_of_equity (46.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.75) + 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.