SSWL.NS WACC - Weighted Average Cost of Capital

The WACC of Steel Strips Wheels Ltd (SSWL.NS) is 16.0%.

The Cost of Equity of Steel Strips Wheels Ltd (SSWL.NS) is 18.00%.

The Cost of Debt of Steel Strips Wheels Ltd (SSWL.NS) is 10.45%.

	Range	Selected
Cost of equity	16.40% - 19.60%	18.00%
Tax rate	23.90% - 27.70%	25.80%
Cost of debt	9.10% - 11.80%	10.45%
WACC	14.5% - 17.4%	16.0%

WACC

SSWL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.15	1.26

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.40%	19.60%

Tax rate	23.90%	27.70%
Debt/Equity ratio	0.24	0.24
Cost of debt	9.10%	11.80%

After-tax WACC	14.5%	17.4%


Selected WACC	16.0%

SSWL.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 SSWL.NS:

cost_of_equity (18.00%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.15) + 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.