SPIC.NS WACC - Weighted Average Cost of Capital

The WACC of Southern Petrochemical Industries Corporation Ltd (SPIC.NS) is 15.0%.

The Cost of Equity of Southern Petrochemical Industries Corporation Ltd (SPIC.NS) is 18.35%.

The Cost of Debt of Southern Petrochemical Industries Corporation Ltd (SPIC.NS) is 8.90%.

	Range	Selected
Cost of equity	16.70% - 20.00%	18.35%
Tax rate	6.20% - 17.20%	11.70%
Cost of debt	8.30% - 9.50%	8.90%
WACC	13.9% - 16.1%	15.0%

WACC

SPIC.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.19	1.3

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.70%	20.00%

Tax rate	6.20%	17.20%
Debt/Equity ratio	0.48	0.48
Cost of debt	8.30%	9.50%

After-tax WACC	13.9%	16.1%


Selected WACC	15.0%

SPIC.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 SPIC.NS:

cost_of_equity (18.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.19) + 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.