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Published by: IBS Case Development Center
Published in: 2019
Length: 6 pages
Data source: Generalised experience

Abstract

The case study 'Weighted Average Cost of Capital of Shree Cement Limited' provides a fundamental understanding of the Weighted Average Cost of Capital (WACC), cost of equity, and cost of debt. The case helps to understand various methods of calculating the cost of equity such as the Capital Asset Pricing Model (CAPM) and the Dividend Discounted Model (DDM). It also covers the estimation of cost of equity using fundamental beta which is applicable in case of an unlisted firm. The case is based on a discussion between a group of first-year MBA students and Dr John Martin (Martin), a professor of Finance. The discussion starts with the concept of cost of equity and gradually leads to WACC. The case concludes with parameters being set for the students to calculate the cost of equity using various methods, cost of debt, and ultimately WACC for Shree Cements Limited.

Teaching and learning

This item is suitable for undergraduate, postgraduate and executive education courses.

Time period

The events covered by this case took place in 2014-2019.

Geographical setting

Region:
Asia
Country:
India

Featured company

Shree Cement Limited
Employees:
5001-10000
Turnover:
INR Rs 128.04 billion
Type:
Public company
Industry:
Cement

About

Abstract

The case study 'Weighted Average Cost of Capital of Shree Cement Limited' provides a fundamental understanding of the Weighted Average Cost of Capital (WACC), cost of equity, and cost of debt. The case helps to understand various methods of calculating the cost of equity such as the Capital Asset Pricing Model (CAPM) and the Dividend Discounted Model (DDM). It also covers the estimation of cost of equity using fundamental beta which is applicable in case of an unlisted firm. The case is based on a discussion between a group of first-year MBA students and Dr John Martin (Martin), a professor of Finance. The discussion starts with the concept of cost of equity and gradually leads to WACC. The case concludes with parameters being set for the students to calculate the cost of equity using various methods, cost of debt, and ultimately WACC for Shree Cements Limited.

Teaching and learning

This item is suitable for undergraduate, postgraduate and executive education courses.

Settings

Time period

The events covered by this case took place in 2014-2019.

Geographical setting

Region:
Asia
Country:
India

Featured company

Shree Cement Limited
Employees:
5001-10000
Turnover:
INR Rs 128.04 billion
Type:
Public company
Industry:
Cement

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