G RO U P – 2 Group Members:

UM19135 Alok Kumar Rath

P re s e nt s UM19136 Alok Kumar Hota
UM19140 Amit Kaushik
Himadri Sekhar
Assignment Of UM19157 Goswami

FINANCIAL MANAGEMENT UM19159 Jyotiranjan Dehury

On
Data of JSW Steel Ltd.
From FY2008 – FY2019
Source:- Bloomberg

JSW Steel revampas acquisition-2018

Acquires Small Steel Industries
Cost Of Equity Cost Of Debt

PA R A M E T E R S

Cost Of Capital
Cost Of Equity

It is the return a company requires to decide if an investment meets

capital return requirements.

DPS
Cost of Equity(Ke) = ​+ GRD
CMV

where:
DPS=dividends per share, for next year
CMV=current market value of stock
GRD (g) =growth rate of dividends​
Here,
g=
Dividend per share next year − Dividend per share current year
Dividend per share current year
Cost Of Equity Cost Of Debt

PA R A M E T E R S

Cost Of Capital
Cost Of Debt

The cost of debt is the effective interest rate a company pays on its
debts

Interest Expense
Cost of Debt (Kd) =
Short term and long term debts
ke -93% 854% 30% -38% 35% 12% 1% -31% 202% 44% 30%

Here, Kd = Cost Of Debt

Cost Of Equity Cost Of Debt

PA R A M E T E R S

Cost Of Capital
Cost Of Capital

It refers to the opportunity cost of making a specific investment.

It is the rate of return that could have been earned by putting the
same money into a different investment with equal risk.

WACC:
The weighted average cost of capital (WACC) is a calculation of a
firm's cost of capital in which each category of capital is
proportionately weighted.
 ke -93% 854% 30% -38% 35% 12% 1% -31% 202% 44% 30%

Kd #VALUE! #VALUE! 6% 7% 9% 8% 8% 8% 8% 9% 10%

WACC #VALUE! #VALUE! 17% -12% 19% 9% 5% -4% 71% 22% 18%

Total Equity Short term and Long term debt

WACC = ∗ 𝐾𝑒 + ∗ 𝐾𝑑
Total capital Invested Total capital Invested
 Beta by CAPM Method Beta by Bloomberg

CAPM
Beta by Formula
Beta for 2020 -0.34
Rf (Average
past 15
years) 7%

Ke 5%
A negative beta correlation means an investment
moves in the opposite direction from the stock
market. When the market rises, a negative-beta
investment generally falls. When the market falls, the
negative-beta investment will tend to rise.
Thank You