501831.BO WACC - Weighted Average Cost of Capital

The WACC of Coastal Corporation Ltd (501831.BO) is 11.2%.

The Cost of Equity of Coastal Corporation Ltd (501831.BO) is 13.65%.

The Cost of Debt of Coastal Corporation Ltd (501831.BO) is 9.05%.

	Range	Selected
Cost of equity	12.50% - 14.80%	13.65%
Tax rate	33.90% - 37.40%	35.65%
Cost of debt	7.80% - 10.30%	9.05%
WACC	10.2% - 12.2%	11.2%

WACC

501831.BO WACC calculation

Category	Low	High

Long-term bond rate	7.5%	8.0%
Equity market risk premium	6.9%	7.9%
Adjusted beta	0.72	0.8

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.50%	14.80%

Tax rate	33.90%	37.40%
Debt/Equity ratio	0.45	0.45
Cost of debt	7.80%	10.30%

After-tax WACC	10.2%	12.2%


Selected WACC	11.2%

501831.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 501831.BO:

cost_of_equity (13.65%) = risk_free_rate (7.75%) + equity_risk_premium (7.40%) * adjusted_beta (0.72) + 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.