500120.BO WACC - Weighted Average Cost of Capital

The WACC of Diamines and Chemicals Ltd (500120.BO) is 13.5%.

The Cost of Equity of Diamines and Chemicals Ltd (500120.BO) is 21.05%.

The Cost of Debt of Diamines and Chemicals Ltd (500120.BO) is 7.90%.

	Range	Selected
Cost of equity	18.60% - 23.50%	21.05%
Tax rate	25.10% - 25.90%	25.50%
Cost of debt	7.90% - 7.90%	7.90%
WACC	12.3% - 14.7%	13.5%

WACC

500120.BO WACC calculation

Category	Low	High

Long-term bond rate	7.2%	7.7%
Equity market risk premium	8.8%	9.8%
Adjusted beta	1.29	1.55

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.60%	23.50%

Tax rate	25.10%	25.90%
Debt/Equity ratio	1	1
Cost of debt	7.90%	7.90%

After-tax WACC	12.3%	14.7%


Selected WACC	13.5%

500120.BO'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 500120.BO:

cost_of_equity (21.05%) = risk_free_rate (7.45%) + equity_risk_premium (9.30%) * adjusted_beta (1.29) + 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.