500655.BO WACC - Weighted Average Cost of Capital

The WACC of Garware Polyester Ltd (500655.BO) is 15.5%.

The Cost of Equity of Garware Polyester Ltd (500655.BO) is 16.20%.

The Cost of Debt of Garware Polyester Ltd (500655.BO) is 9.70%.

	Range	Selected
Cost of equity	14.90% - 17.50%	16.20%
Tax rate	33.40% - 33.60%	33.50%
Cost of debt	8.70% - 10.70%	9.70%
WACC	14.3% - 16.8%	15.5%

WACC

500655.BO WACC calculation

Category	Low	High

Long-term bond rate	7.5%	8.0%
Equity market risk premium	6.9%	7.9%
Adjusted beta	1.07	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.90%	17.50%

Tax rate	33.40%	33.60%
Debt/Equity ratio	0.07	0.07
Cost of debt	8.70%	10.70%

After-tax WACC	14.3%	16.8%


Selected WACC	15.5%

500655.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 500655.BO:

cost_of_equity (16.20%) = risk_free_rate (7.75%) + equity_risk_premium (7.40%) * adjusted_beta (1.07) + 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.